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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