Poll dancing

One way government could do a better job of encouraging EV adoption, would be somehow getting the incentives into the original car deal. In the above example, the buyer  would have to qualify for a $32,800 loan (less down payment and plus tax, title and license), even though the Volt ends up costing them only $22,800, once they receive the incentives. This eliminates a HUGE number of potential buyers who cannot afford or qualify for such a large amount. Worse, those are the very people who NEED the savings an EV provides! But wait, it gets even worse. Those with lower incomes also have lower taxes. Because the maximum amount of the benefit is a buyer’s total income tax burden, those who pay less than $7,500 in income tax (either through lower income or tax deductions like mortgage interest and real estate taxes reducing their tax burden) only get the amount of their tax. Any remainder is lopped off, with no rollover to the next tax year.

Another unexpected problem with the income tax credit is that it biases sales to the last few months of the year, when buyers know they’ll be able to take advantage of the income tax credit soon, when they file their income tax returns early in the next year. Conversely, this means the tax credit discourages purchases earlier in the year, because the purchaser will end up waiting up to an entire year before receiving the benefit of the tax credit.

There is also a perception problem with the incentives from the government. Those upset by the GM takeover by the government see the incentives as handouts. Many EV owners have heard the comment, “Are you enjoying your car that my taxes helped pay for?” Oddly enough, many of those same people don’t consider the tax incentives associated with home ownership to be the same… Increasing the incentives would only add fuel to that fire and probably result in a call to end all incentives for EVs. In my opinion, this would be a grave error for the U.S., as we are one of the leading countries in the field at this time. Abdicating this position would be the equivalent of deciding not to build an oil exploration capability in the previous century, leaving it all up to OPEC. Battery technology development is a strategic strength for us and must be exploited.

If the government were to invest further funds in pushing EV adoption, I have a few recommendations on places to put our hard-earned tax dollars:

• Most important: Aggressively advertise the existence of current incentives as well as the reasons for them.
• Develop parking regulations that prohibit gasoline-powered vehicles from parking in spaces allocated for charging, and aggressively enforce them.
• Follow the example of California and allow EVs to have access to high occupancy vehicle (HOV) or express lanes. (This seemed to have a phenomenal impact on EV adoption in the Golden State.) In Texas, where tollways have become popular (with the government anyway), grant EVs the same discount given to vehicles with multiple occupants. This would be simple to implement, as our toll tag accounts have information on our vehicle type.
• Have special license plates for EVs and hybrids to make them stand out more. Nothing sells an EV quite like the question, “How do you like your EV?” Those of us who own them are more than happy to share their benefits with others.
• Prepare the public for a change in the method of calculating and collecting taxes that are currently included in the price of gasoline at the pump. As I’ve mentioned before, we need our tax system to disconnect from any fuel/energy type. With hydrogen fuel cell vehicles coming out now, a system taxing electricity, hydrogen, gasoline, diesel, etc will become too cumbersome.
• Finally, prepare the public, well in advance, for an end to oil subsidies and the effect that will have on prices. If we seriously want to reduce carbon emissions, we have to consider this step. However, as this has not been publicly discussed in detail, the American public has been happy to continue buying large, inefficient vehicles. They should not be penalized by making their purchases worthless overnight, so this is an important step to start discussing now with the intention to be implementation of the change, after the average ownership span of a vehicle. Perhaps seven to ten years from now, we could remove the oil subsidies.

As you can see from the graph above, I’m in a very small minority, when it comes to the question posed by the poll. We’ve thrown money at the adoption rate. Perhaps it’s time we tried some more ideas.

What are your ideas to increase EV adoption?