Opinion: Reforms needed for federal EV tax credit

Clean fuels vehicles aren’t just the future, they’re here now.

In fact, alternative fuels vehicles support almost 300,000 American jobs, including thousands in Michigan. Sales of electric vehicles, also known as EVs, have grown in recent years, in part because of their low operating cost and environmental benefits. Another factor is a federal tax credit that has helped reduce their upfront cost, allowing more consumers to afford this exciting new technology. While the tax credit has been effective, it must be updated to reflect the growth and potential of the evolving EV industry.

That’s why consumer, industry and environmental stakeholders recently came together to form the EV Drive Coalition. Our mission is to reform and recharge the electric vehicle tax credit to keep the U.S. competitive in the rapidly changing transportation sector.

The existing $7,500 tax credit has spurred industry growth because it goes directly to the consumer who purchases an electric vehicle. As a relatively new industry, these tax credits have propelled growth because consumers are confident their investment is beneficial to both themselves and the environment. The problem is that for each manufacturer, there is a cap for how many vehicles can be sold with the tax credit. Reforming the credit to lift the manufacturing cap will avoid stunting the industry’s growth and keep us competitive in the global market.

We acknowledge there is a need to phase out the tax credit eventually as more electric vehicles hit the road. However, the U.S. electric vehicle sector still needs the credit to reach its full potential. Failing to fix the tax credit will allow global competitors to take over the EV market while America falls behind. The EV credit is a highly successful, market-based approach to keeping U.S. auto manufactures competitive, and phasing it out too early would hinder this emerging sector of our economy.

When Georgia phased out the EV tax credit, the state saw a 90 percent decline in EV sales, illustrating the importance of the two-way investment between the consumer and producer. Consumers want options and, with so many new electrified vehicles coming to market over the next few years, need to be assured that they can invest in the EV of their choice at an affordable rate.

An analysis by Clean Fuels Michigan found that the clean mobility sector contributes $18.8 billion to Michigan’s economy as well as $700 million in state and local taxes, and this is just the beginning. Bloomberg New Energy Finance estimates that by 2030, global sales of electric vehicles will reach 30 million. Ten years later in 2040, there are estimated to be 500 million electric vehicles on the road. The unprecedented potential for growth in the EV industry can only be fully realized if we continue to reward consumers for their investment in a sustainable future and encourage more EV manufacturers to create more jobs here at home.

The EV Drive Coalition understands that automobiles are an essential part of everyday, American life and believe that the future of EV production starts here, in places like Michigan where automotive sector jobs account for  15 percent of the workforce. America’s progress in the EV industry is steady, but through reforming the tax credit, it can soar.

Published in The Detroit News on November 29, 2018

Lawmakers Announce Clean Mobility Legislation During ‘Drive Electric Week’

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Drive Electric Week celebrates benefits, opportunities for electric vehicles, advanced mobility

LANSING, Mich.–– As events take place across the state for National Drive Electric Week, Representatives Bronna Kahle (R-Clinton) and Michael Webber (R-Rochester Hills) today announced legislation that would help remove barriers for the sale, research and development of electric vehicles and other clean mobility technologies.

House Bill 6328, introduced by Rep. Kahle would create incentives for businesses that make investments into the research and development of electric vehicles and advanced mobility. This bill would help small and mid-sized companies invest in R&D for advanced mobility in Michigan.

“Michigan’s rich history as the auto capital of the world means we should be a leader in the future of transportation and vehicle production,” said Rep. Kahle. “My legislation keeps Michigan on the cutting edge of innovation and supports next-generation companies. It’s part of a plan promoting job creation, community revitalization and clean fuels – three positive goals that can be accomplished together with the right strategy.”

House Bill 6083, introduced by Rep. Webber would make electric and alternative fuel vehicles exempt from a portion of the sales tax, which would be calculated based on the vehicle’s weight.

“Electric and autonomous vehicles are the future of transportation in Michigan and across the country, and my legislation will remove barriers for Michiganders who want to take advantage of the growing advanced mobility trend,” said Rep. Webber. “Currently, consumers seeking to purchase an electric vehicle face many hurdles and additional fees that make owning an EV out of reach for many, and my legislation seeks to increase access to those consumers who wish to save money on gasoline and promote cleaner transportation.”

In May, Clean Fuels Michigan, an organization of businesses and organizations focused on growing a high-tech, clean transportation industry in Michigan released a report on the economic impact of the clean mobility industry in Michigan. The report found that the industry contributes $18.8 billion to Michigan’s economy each year, and supports more than 69,000 jobs.

“Clean transportation technologies will play an increasingly important role in Michigan’s auto industry, which is why it is important to have policies in place that position Michigan to lead in this rapidly changing industry,” said Mike Alaimo, executive director of Clean Fuels Michigan.  “There is massive potential for growth and further investment in the clean mobility industry, and I applaud Reps. Kahle and Webber for introducing legislation that would help Michigan seize on this potential.”

Clean Fuels Michigan, along with other industry partners such as Greater Lansing Area Clean Cities Coalition, the Michigan Agency for Energy and General Motors, participated in events for Drive Electric Week including an electric vehicle ride and drive.

“Vehicle electrification is a vital component of the automotive industry’s seismic transition towards advanced mobility technologies,” said Britta Gross, director of advanced vehicle technology and commercialization policy for General Motors. “Investing in this technology will support jobs and the environment, and help Michigan maintain its’ leadership as the automotive capital of the world during a time of unprecedented competition.”

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Report: Clean mobility sector pumps $18B into Michigan’s economy annually

New report on clean mobility in Michigan details economic, environmental, consumer benefits

The clean mobility sector contributes $18.8 billion to Michigan’s economy and generates over $700 million in state and local tax revenue annually, according to a new economic analysis released today by Clean Fuels Michigan. The study was conducted by Public Sector Consultants and analyzed various economic benefits that result from private sector investments in research, development and commercialization of clean mobility technologies. Clean mobility includes vehicles that use less-polluting alternatives to fossil fuels, such as biofuels, propane, natural gas, hydrogen fuel cells, electrification and hybrids.

“Whether we are looking to support advanced mobility innovations like autonomous or connected vehicles, preserve and grow our skilled workforce, or do more to support clean energy solutions, clean transportation technologies are truly the backbone of a global arms race towards the next generation of mobility,” said Mike Alaimo, Executive Director of Clean Fuels Michigan.  “As the auto capital of the world, Michigan needs to ensure that our policies reflect the rapid change and fierce competition in the global arena.”

Key findings from the analysis include:

  • The clean mobility sector contributes $18.8 billion to Michigan’s economy each year, generating over $700 million in state and local taxes
  • With indirect and induced employment, Michigan’s clean mobility supply chain contributes over 69,000 jobs to the state’s economy
  • Michigan currently has 29,000 direct clean fuel vehicle jobs
  • Technology and policy changes will push the vehicle sector increasingly towards clean fuels
  • Clean fuel vehicles have enormous potential to decrease healthcare costs associated with poor air quality

“The rapid growth of clean fuel vehicles has big implications for Michigan’s automotive, tech and energy industries, which make up a significant portion of the state’s workforce,” said Jeff Guilfoyle, Vice President of Public Sector Consultants and lead author of the study. “Millions of these vehicles are projected to be on our roads over the next few years. Government policies have and will continue to play an important role when looking at ways this evolving industry can affect Michigan’s overall economic health.”

Michigan Automakers and utility companies are actively working to support the increased adoption of electric vehicles and see significant benefits of vehicle electrification for Michigan.

“Supporting innovation in the clean fuels sector can drive down costs and help us overcome barriers to electric vehicle adoption, like access to charging infrastructure,” saidVince Carioti, Director of E-Mobility at Phoenix Contact. “As a large, privately held auto supplier, we see enormous opportunity for growth in Michigan’s clean fuels sector and are excited about working to increase our presence there.”

“DTE Energy is working to ensure plug-in electric and natural gas vehicles (PEVs and NGVs respectively) are integrated in a manner that ensures safe and reliable operation of the grid,” said Rob Bacyinski, Program Manager of Natural Gas Vehicle Business Development, DTE Energy and Chair of the Board at Clean Fuels Michigan. “We believe that clean fuels and electric vehicles will bring added benefits to not only the energy grid, but customers and the public at large.”

The full report can be found here.

How Michigan’s New Road Funding Plan Affects Alt-Fuel Vehicles

Known nationally and internationally as the birthplace of the automobile industry, Michigan has become equally prominent for its crumbling roads and aging infrastructure.

Over the past several years, there have been numerous attempts to solve Michigan’s road funding problem, including a ballot proposal earlier this year. At last, Nov. 10 marked an important day for Michigan, as Gov. Rick Snyder signed a comprehensive road funding package into law, the first of its kind since 1997…

While sensitive to arguments against the new legislative package, nonprofit advocacy group Clean Fuels Michigan (CFM) acknowledged the need to finally see a road funding solution signed into law…

Read the full article on NGTNews.com →

Business Leaders Announce Formation of Clean Fuels Michigan

A coalition dedicated to growing a high tech, clean transportation industry in Michigan

Nearly 30 leading companies and organizations in Michigan today announced the formation of Clean Fuels Michigan. The new 501(c)(6) organization aims to maintain Michigan’s position as a global leader in automotive manufacturing by advancing a clear vision, strategy, and advocacy centered on advanced powertrain technology and innovation. The overall goal is to promote investment, job growth and sustainable technologies in Michigan.

Michigan’s leadership position in the automotive industry is well known. It supports more than 513,000 jobs and provides nearly $36 billion in annual earnings. However, dynamic forces are rapidly changing the future of mobility and 37 states have policies to promote alternative fuel vehicles. Michigan is one of the relatively few states with no incentives supporting the purchase of alternative fuel vehicles, which is why we rank 41st out of 50 states in the number of alternative fuel vehicles per capita.

Michigan must act quickly so that it can capitalize on the developing marketplace and ultimately improve Michigan’s overall economic competitiveness,” said Chris Milani, Principal of the Rustbelt Group. “There needs to be a favorable policy climate so that Michigan can stay in the game and attract talent and position itself as the innovation leader for clean fuel technology,” Milani added.

Clean Fuel Michigan will advance clean fuel neutral policies, such as electric, natural gas, propane and hydrogen fuel cell technology, advise policy makers, and help commercialization efforts.

“Our members collectively believe in economic opportunities that stem from developing this technology and markets in Michigan,” commented Eric Clinton, Manager of NGV Business Development at DTE Energy.

Investments in clean alternative fuels will not only provide economic benefits to our communities but result in environmental improvements that are essential to the health and well being of Michigan’s citizens.