Texas electric vehicle program under scrutiny for subsidizing the wealthy – Reuters


(The Center Square) — A Texas program that gives millions of dollars in taxpayer-funded rebates for the purchase of new electric vehicles is under scrutiny to subsidize affluent people who buy luxury cars. An analyst requests the end of the program.

One person received a $2,500 rebate under the program after purchasing a Porsche 918 Spyder, a limited-production hypercar with a base price of $845,000. This car, which has a top speed of over 200 mph, has a range of just 12 miles in all-electric mode, according to the US Environmental Protection Agency.

Another Texas resident was reimbursed $2,500 for the purchase of a Karma Revero GT. The 2021 version of this sports car has a list price of between $144,800 and $152,800, according to Edmunds. Other cars purchased under the program include 12 BMW i8 electric sports cars, a Land Rover Range Rover and other luxury vehicles.

Nearly 20% of the $14.3 million in grants awarded under the state’s light vehicle purchase or lease incentive program went to buyers of luxury cars. Buyers of vehicles from luxury automakers Audi, BMW, Cadillac, Jaguar, Land Rover, Lincoln, Mercedes-Benz, Porsche and Volvo got combined rebates of $2,784,528. This represents 19% of the total amount of grants awarded under the program from 2014 to 2021.

Studies show that people who are likely to buy an electric vehicle have a median annual household income of $95,000. BlastPoint, a data analytics firm in Pennsylvania, reported that its research found that about 25% of likely EV buyers have an annual household income above $150,000 per year.

The median household income in Texas in 2020 dollars from 2016 to 2020 was $63,826, according to the US Census Bureau. The average price of a new electric vehicle was $56,437 in November 2021, about $10,000 more than the average new vehicle price across the industry of $46,329, according to Kelley Blue Book.

The rebate program awarded more than $14.3 million in taxpayer-funded rebates to people who purchased or leased 5,931 vehicles from 2014 through August 2021, according to the Texas Commission on Environmental Quality. Texas has more than 22 million registered vehicles, according to the Texas Department of Motor Vehicles.

“The nearly 6,000 vehicles that were purchased under the TERP [Texas Emissions Reduction Plan] have done nothing to measurably improve air quality levels in Texas cities,” said Brent Bennett, policy director for Life:Powered at the Texas Public Policy Foundation. “Our emissions are so low that our air is almost in its natural state, with weather being by far the biggest contributor to air pollution. In fact, during the COVID-19 shutdowns in 2020, air quality levels air in Texas cities have remained nearly unchanged, even though vehicle miles traveled have fallen by nearly 50%.Improvements in emissions control technologies and fuel efficiency are doing much more to improve air pollution. looks like subsidizing electric vehicles.

Bennett said lawmakers should scrap the reimbursement program.

“Our lawmakers need to realize that the TERP vehicle rebate program is pointless,” he said. “A lot of the rebates go to luxury vehicles where the rebate is clearly not a determining factor in the purchase. Texas would be better off disbanding the program and eliminating the vehicle registration fees that fund it.

The state’s light-duty vehicle purchase or lease incentive program provides rebates of up to $5,000 to individuals who purchase or lease new vehicles powered by compressed natural gas or liquefied petroleum gas and up to $2,500 to people who buy or lease new electric vehicles. According to the rules of the program, only people who buy or lease new vehicles from a dealership are eligible for rebates. The program has no cap on the price of vehicles eligible for rebates, and top-selling electric vehicle models in the United States, which are manufactured by Tesla, are not eligible for the rebate program because Tesla does not. . have dealers. The program also has no income limit for buyers.

According to a report of the Texas Commission on Environmental Quality, which administers the program.

The Nissan Leaf, one of the cheapest electric vehicles on sale in the United States, generated 1,416 rebates totaling $3,064,645. The second most popular was the Chevrolet Bolt EV, which had 758 discounts totaling $1,895,000. This was followed by the Chevrolet Volt, which accounted for 663 discounts totaling $1,640,000, according to records from 2014 to August 2021. These three models alone accounted for discounts of $6,599,645, or 46% of the total discounts granted from 2014 to August 2021.

Texas State Senator Brian Birdwell, R-Granbury, was the author of Senate Bill 1731 in 2017, the last bill passed into law that made changes to the purchase incentive program or government light vehicle leasing. HW Dickey, Senator Birdwell’s chief of staff, did not respond to emailed questions about the program or how it was used.

State Rep. Morgan Meyer, R-University Park, who sponsored Senate Bill 1731, did not return multiple phone calls to his district office seeking comment on the incentive program.

The Lone Star chapter of the Sierra Club in Texas, which supported Senate Bill 1731, also did not respond to a request for comment on the state’s program.

Senate Bill 5 created the Light Motor Vehicle Purchase or Lease Incentive Program in 2001, but the statewide incentive program only received funding. in 2014 after a legislative overhaul. It then expired, and lawmakers reinstated it later in 2017, according to the Texas Commission on Environmental Quality.

“Over the past decade, the Light Duty Vehicle Purchase or Lease Incentive Program (LDPLIP) has played a role in dramatically improving air quality in Texas,” the report said. agency in a statement citing a report. “Emissions from mobile sources – including light-duty vehicles – are the largest contributor to ozone pollution in most urban areas. However, Texas (like most states) does not have the authority to regulate emissions from mobile sources. To combat mobile emissions in light of this federal preemption, the Texas Legislature created the Texas Emissions Reduction Plan or TERP, a voluntary program that provides grants to help provide cleaner alternatives.

The report did not specify the specific role of the incentive program for the purchase or lease of light vehicles in improving air quality. The report listed the number of vehicle rebates issued under the program.

“It is impractical, if not impossible, to quantify the emission reductions attributable to the LDPLIP incentive grants, individually or in aggregate,” the agency said. “The program encourages greater use of electric or alternative fuel powered vehicles in Texas. While increased use of electricity or alternative fuels for transportation can have positive impacts on air quality in the state, the program does not quantify emission reductions for each grant awarded.

Most US states have similar reimbursement programs.

At least 47 states and the District of Columbia had programs as of July 2021 to support electric vehicles through supporting infrastructure, legislation, or financial incentives for the purchase of electric vehicles or power supply equipment. electric vehicles, according to the National Conference of State Legislatures.

Oregon has a similar program to Texas, but with a few differences.

The Oregon Department of Environmental Quality’s Oregon Clean Vehicle and Charge Ahead Rebate programs provide up to $2,500 toward the purchase or lease of a qualifying new electric vehicle. Low- and middle-income residents can get up to $7,500 on qualifying new or used electric vehicles.

In New York, the Charge NY program offers electric car buyers a rebate of up to $2,000 for the purchase or lease of new cars, according to the New York State Energy Research and Development Authority.

In addition to state incentives, EV buyers can also get federal rebates. All-electric and plug-in hybrid cars purchased new in or after 2010 “may qualify for a federal tax credit of up to $7,500.” The credit amount will vary depending on the capacity of the battery used to power the vehicle,” according to the US Department of Energy and the US Environmental Protection Agency. Under the federal program, the 2015 Porsche 918 Spyder could qualify for a credit of up to $3,667, according to the federal website.

In 2021, Democrats in Congress and President Joe Biden proposed increasing tax credits for electric vehicles up to $12,500, including a $4,500 incentive for vehicles assembled in the United States made by unions, Reuters reported.

Republicans pushed back on those plans. “Given that only the wealthiest 1% of Americans drive electric vehicles, the committee should focus on more pressing issues,” U.S. Representative Fred Upton told the energy subcommittee in March.

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