Reasons to Rethink a Rushed 'EV' Transition
Posted February 8, 2021
Across America, we want our roadways to be safer, cleaner and more accessible. Electric-vehicle (EV) technologies may appear to offer clear-cut solutions to modern challenges, but government action to limit Americans’ transportation choice could leave everyday drivers high and dry.
What Americans May Not Know: New cars, SUVs and pickup trucks that are powered by internal combustion engines have become much more efficient over the last few decades. This is in large part because the U.S. energy and automobile industries have invested in lightweight innovations to improve vehicle fuel efficiency while keeping passengers safe. Indeed, multiple studies show that, on a lifecycle basis, different automobile powertrains result in similar greenhouse gas emissions.
Relatedly, National Highway Traffic Safety Administration studies have concluded that plastics and composite materials – which are primarily manufactured using petroleum feedstocks – can considerably reduce the weight of vehicles while meeting performance and safety requirements. And don’t forget today’s cars are about 99% cleaner for most tailpipe pollutants compared to vehicles in 1970.
To be clear, there is room on our roads for every type of powertrain – including EVs. But we should be careful to avoid government interventions that disrupt the marketplace, limit consumer choice and produce unintended results.
Here are three ways a rushed EV transition would ultimately impact American drivers:
- Increased Vehicle Inequity: Right now, consumers can claim a federal tax credit of up to $7,500 for qualifying EV purchases, but these credits disproportionately benefit upper-income households, whose vehicles are effectively subsidized by other taxpayers. Since 2016 about 80% of the federal EV tax credits have been claimed by taxpayers with annual incomes of $100,000 or more.
- Depleted Roadway Funds: EV adoption has inadvertently contributed to shortages in infrastructure funding, as EV drivers bypass the gasoline taxes that support the federal Highway Trust Fund. Typical drivers pay about 18 cents per gallon of gas in federal taxes, plus an average of 31 cents at the state level. Many EV owners are exempt from these taxes.
- Every Driver and Non-Driver Pays for EV Charging Infrastructure: Relying on electric utility companies to fund EV charging infrastructure will result in electric utilities raising their customers’ rates to fund the development of EV charging supply equipment. This will unfairly burden non-EV drivers, and those without vehicles, by forcing them to fund EV charging infrastructure build-out that they may never use. Further, it eliminates competition from non-utilities who want to get into the business of providing charging services.
Bottom line – efforts to subsidize EV adoption can be costly for taxpayers and consumers.
Meanwhile, some leaders in the public and private sectors alike have gone a step further, suggesting a variety of bans on vehicles powered by internal combustion engines. Such proposals are disconnected from the reality of our nation’s transportation and climate solutions. It is important to keep in mind that EVs still represent less than 2% of the U.S. auto market – and only about 3% of new car sales globally. Motorists continue to choose traditional powertrains for a variety of benefits, including range, flexibility and cargo capacity.
As the U.S. balances vehicle production with consumer preferences – and climate solutions with infrastructure demands – lawmakers should support fuel- and technology-neutral policies that will reduce greenhouse gas emissions without resorting to the seemingly simple solution of choosing a single technology. American consumers are the best people to determine what vehicles they want to drive; they don’t want lawmakers making that choice for them. Government policies should work for all Americans, and the road to a stronger and more sustainable transportation future begins with consumer choice and fairness.
About The Author
Mike Sommers is the 15th chief executive of API since its founding more than a century ago. Prior to coming to API, Mike led the American Investment Council, a trade association representing many of the nation’s leading private equity and growth capital firms and other business partners. He spent two decades in critical staff leadership positions in the U.S. House of Representatives and the White House, including chief of staff for then-House Speaker John Boehner. Mike is a native of Naperville, Illinois, and a graduate of the honors program at Miami University in Oxford, Ohio. Mike and Jill Sommers, a former commissioner at the Commodity Futures Trading Commission, have three children and live in Alexandria, Virginia.