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REPORT: Taxpayer Subsidies Propping Up Electric Vehicle Market

Posted on Wednesday, December 20, 2023
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by Andrew Shirley
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AMAC Exclusive – By Andrew Shirley

Dutch road sign: electric vehicle charging station

While electric vehicle (EV) proponents have long touted that EVs are cheaper than internal combustion engine vehicles (ICEV) on a per-mile basis, a recent study has cast serious doubt on that assertion and warned that EV costs could rise significantly with some government subsidies now in jeopardy. Meanwhile, the Biden administration has poured billions of dollars into building more EV charging infrastructure with virtually nothing to show for it.

According to a report from the Texas Public Policy Foundation (TPPF), despite various claims that the cost of charging an EV equates to less than $1.50 per gallon of gasoline averaged out over the lifetime of the vehicle, “the true cost of fueling a 2021 EV, including excess charging costs and subsidies, is equal to $17.33 per gallon of gasoline.”

As TPPF explains, most per-gallon cost comparison estimates released by EV advocates only take into account how much the electricity needed to charge an EV costs. For example, if a full recharge for an EV requires 75 kilowatt-hours of electricity, EV companies will claim that each recharge only costs as much as that amount of energy – around $10 to $14 in most states.

But these estimates don’t take into account the energy lost when converting electricity from alternating current, used in the power grid, to direct current, used in EVs, nor do they account for the extra energy needed to overcome a battery’s resistance to charging as it nears full capacity. These factors alone more than double the per-gallon equivalent cost of an EV charge.

But the real hidden costs that EV advocates miss (or just ignore) are the massive subsidies that the federal government has been handing out in recent years – more than $200 billion so far not including the hundreds of billions more contained in Biden’s so-called “Inflation Reduction Act.”

Another more obvious added cost of EVs is that they are simply more expensive to purchase. According to TPPF, an average EV is about $22,000 more expensive than a comparable ICEV – and that’s with the $7,500 tax credit that the Biden administration has offered on a significant number of EVs. Many states also offer up to $1,500 in tax credits on certain EVs, further obscuring the true cost.

But thanks to new policies aimed at countering China, many of those subsidies, including on Tesla, far and away the most popular EV brand, could soon be going away.

According to reporting from Politico earlier this month, a series of new rules recently unveiled by the Biden administration would “disqualify a vehicle from receiving the credit if even one of its suppliers has loose ties to Beijing, such as producing parts in China or having as little as 25 percent of board seats controlled by China.”

The policy could be a major hit for companies like Ford, which has invested heavily in its EV lineup but has relied heavily on Chinese battery technology and manufacturing.

In short, electric vehicles could become a lot more expensive in the very near future, undoubtedly making Americans even less enthusiastic about buying one.

Despite a potentially rocky road ahead, however, Biden has plowed forward with plans to require that 67 percent of all new vehicle sales be electric by 2032, a policy many are calling an EV mandate. Although the House has passed legislation barring the administration from moving forward with the regulation, Biden has said that he would veto the bill if it were to make it past the Democrat-controlled Senate.

Even more concerningly for Americans now facing the prospect of being forced into an expensive EV, Biden has offered no reason to believe that the government is capable of fulfilling its promises to significantly expand EV infrastructure in the near future.

Despite allocating some $7.5 billion for new EV charging stations in the 2021 infrastructure law, for instance, the very first charging station funded by the bill was just opened in Ohio on December 11 – more than two years after passage of the bill.

The White House has attempted to sell this “milestone” as a major accomplishment, but industry experts remain skeptical that the government is capable of meeting the demand for charging stations that its EV mandate will create. The National Electric Vehicle Infrastructure program calls for half a million charging stations to be built by 2030. One in two years is not a good start.

All of this could mean a nightmare scenario for American drivers is just around the corner. Dozens of news stories over the past few years have documented the headache of long lines at charging stations throughout the country. A J.D. Power survey from August of this year found that 20 percent of EV owners have visited a charging station but left due to long lines, and that satisfaction among EV owners with their charging experience overall has plummeted by 36 points since 2022.

It may well be the case that EVs are the wave of the future, and the technology will eventually surpass the convenience and affordability of ICEVs.

But at the present moment, it seems that the entire industry is being propped up by government subsidies and mandates. Once the training wheels are inevitably removed, the entire auto industry – and perhaps by default the American economy – could be in for a shock.

Andrew Shirley is a veteran speechwriter and AMAC Newsline columnist. His commentary can be found on X at @AA_Shirley.

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PaulE
PaulE
5 months ago

Nothing new being stated in this article. You could have written it 10, 20 or 30 years ago and come to the same conclusions, because nothing fundamentally has changed in terms of the nature of the limitations and true economic costs of wind and solar power or EVs. Thus, the need for government mandates and taxpayer-funded subsidies.

The entire “green agenda” has been wholly dependent on taxpayer funded subsidies for its survival since day one going back to the 1970s. From both a technical and economic perspective neither solar, wind nor EVs have ever been cost effective or superior to other cheaper, more practical and efficient energy sources, means of power generation or modes of transportation. Thus, the need for endless injections of ever-increasing amounts of taxpayer funding, in the form of government subsidies, to prop up the green dream.

Jerry
Jerry
5 months ago

The first government subsidy should have never been given to any of the green energy, electric vehicle bull crap. They should rise or fall on their own merit.

RC100
RC100
5 months ago

And, how about the environmental disaster waiting down the road with disposing of these solar panels supplying this “magic elixir” of an energy solution.

David Millikan
David Millikan
5 months ago

Another scam by Fascist liberals at tax payers expense. They keep pumping in tax dollars for their lies. Fascist liberals still haven’t told the public of ALL the hidden cost and dangers including no way to repair their EV’s or charge them anywhere or the TRUE cost of what it would cost to to charge them among many other problems.

anna hubert
anna hubert
5 months ago

Every single organization department and group involved in saving this that or another with gargantuan administration has been dependent on subsidies and donations They sure have a good gig going What exactly have they saved no one knows Not too open about it nor are the books

Casey C Matt
Casey C Matt
5 months ago

As the manufacturers are discovering, very few people want these atrocities. Not only is the tech not ready but if it ever becomes ready we must face the cost on several levels including facts like western countries lack lithium supplies forcing the import of lithium from countries we have tended to horribly abuse in the past and which now are starting to finally push back and demand just payment for their raw materials that often come at a physical cost to the miners of these materials. It seems the US goal was to “sacrifice darkie: in order to appease the cult like desire to cure the non existent myth of climate change (I think that the latest altered term, no longer “global warming” or “global cooling”).
Americans want real cars and they want real damned gas to put in them. Get over the idiocy especially on my tax dime

Jackie
Jackie
5 months ago

I don’t want the federal government funding any more failing companies!!! If they are doomed to fail because of either bad management or whatever the cause, let them fail!!!! We saw what Obama did with his rescuing of Solyndra and others who were actually given loans but never repaid them – that’s why you shouldn’t pick winners and losers, dear Democrats, because you are ignorant when it comes to that!!! And so, we are just out the millions that you, Obama, chose to spend on useless, not ready for prime time companies and products!!!
This time, it’s the EV’s and my ideas here are that the elite environmentalists and Washington politicians have invested in companies that were set to profit from the sales of EV’s!!! So for the federal government, Joe Biden, to mandate the purchase of EV’s by everyone only serves to make 10% Joe Biden even more money!!! I am not enthused by someone mandating that I buy something for the purpose of making more Joe Biden wealthy!! And I don’t buy the Democrat’s bs about the environment!!! China and India are pumping out toxins to the point that their air is brownish orange!!! We have made significant changes already to protect the climate but we need to see some changes from other countries or our efforts are useless!!

TPS
TPS
5 months ago

Come on man, don’t let true stats get in the way of pushing a government agenda. Remember somebody’s making money here, just not everyday taxpayers. IMO

William Hodge
William Hodge
5 months ago

Over the last couple of years I’ve seen recharging stations pop up behind hotels, in strip malls and other out of the way areas. I actually saw 2 cars once using them. I figured it was government vehicles. Who is choosing these locations and who is paying for installation? I don’t want one cent of my tax payments used for EV charging stations, wind farms or solar farms. Gas is what has made this country grow and if real alternatives aren’t available then I want gas for the next 100 years.

James
James
5 months ago

Of Course–how else could a preposterous scheme like this be funded?

Garyk
Garyk
5 months ago

It’s just another marxist democrat party and the globalist buddies latest plan to fleece American Taxpayers!!
Just like the global warming garbage, the solar panel and windmill garbage, covid fiasco, these battery operated vehicles NOBODY WANTS, and allocating billions to a grid system – MORE RIPOFF of America!!
Plain and simple – LIES and CORRUPTION
THROW THESE ANTI AMERICAN LOSERS OUT

Nanc
Nanc
5 months ago

Your article doesn’t mention where the battery components come from (China?) and how about what do we do with the batteries once they no longer work?

ray
ray
5 months ago

i can’t find any record of the government spending billion on gas stations. free market did it. let the charging stations do the same. any failure is the fault of those pushing a bad product. they should be liable. if it is a better idea, they will make their money the right way. not off government forced payments by the tax payer.

Robert Zuccaro
Robert Zuccaro
5 months ago

Does Joe get 10% on each sale?

Rich
Rich
5 months ago

Taxpayer subsidies. This is new news? I’m sure many corrupt politicians have made big bucks on the “green” agenda, hence their support.

Smike
Smike
5 months ago

Most of us have lived in a world where oil is an endless source of power. And for most of us it is. There is no far seeable end to oil at least in my generation and probably for generations to come. But someday, the oil pumps will run dry. Then what….

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