Were America's Electric Car Subsidies Worth the Money? (msn.com)
- Reference: 0175246409
- News link: https://hardware.slashdot.org/story/24/10/14/0020245/were-americas-electric-car-subsidies-worth-the-money
- Source link: https://www.msn.com/en-us/money/markets/e-v-tax-credits-are-a-plus-but-flaws-remain-study-finds/ar-AA1rPfuA
> "What the [subsidy legislation] did was swing the pendulum the other way, and heavily subsidized American carmakers," said Felix Tintelnot, an associate professor of economics at Duke University who was a co-author of the paper. Those benefits were undermined, however, by a loophole allowing dealers to apply the subsidy to leases of foreign-made electric vehicles. The provision sends profits to non-American companies, and since those foreign-made vehicles are on average heavier and less efficient, they impose more environmental and road-safety costs. Also, the researchers estimated that for every additional electric vehicle the new tax credits put on the road, about three other electric vehicle buyers would have made the purchases even without a $7,500 credit. That dilutes the effectiveness of the subsidies, which are forecast to cost as much as $390 billion through 2031.
The chief economist at Cox Automotive (which provided some of the data) tells the Times that "we could do better", but adds that the subsidies were "worth the money invested". But of course, that depends partly on how benefits were calculated:
> [U]ing the Environmental Protection Agency's "social cost of carbon" metric, they calculated the dollar cost of each model's lifetime carbon emissions from both manufacturing and driving. On average, emissions by gas-powered vehicles impose 57% greater costs than electric vehicles. The study then calculated harms from air pollution other than greenhouse gases — smog, for example. That's where electric vehicles start to perform relatively poorly, since generating the electricity for them still creates pollution. Those harms will probably fade as more wind and solar energy comes online, but they are significant. Finally, the authors added the road deaths associated with heavier cars. Batteries are heavy, so electric vehicles — especially the largest — are likelier to kill people in crashes.
>
> Totaling these costs and then subtracting fiscal benefits through gas taxes and electricity bills, electric vehicles impose $16,003 in net harms, the authors said, while gas vehicles impose $19,239. But the range is wide, with the largest electric vehicles far outpacing many internal combustion cars.
By this methodology, a large electric pickup like the Rivian imposes three times the harms of a Prius, according to one of the study's co-authors (a Stanford professor of global environmental). And yet "we are subsidizing the Rivian and not the Prius..."
[1] https://www.msn.com/en-us/money/markets/e-v-tax-credits-are-a-plus-but-flaws-remain-study-finds/ar-AA1rPfuA
subsidies are political levers (Score:2)
nice economic study
But Tesla disrupted all automakers. The USA is a car-first nation with a lot of distance to cover nationwide. Twin calamities of EV and global warming threw the whole underpinning of burning oil to get energy in cars. Subsidies were a life ring to legacy and EV automakers to transition their business away from oil.
We will see the results beginning latter half 2025 through 2027 how well that money was spent. Of the 400+ automakers worldwide, don’t expect more than two US automakers t
RENTAL (Score:2)
Ban ICE except for rental and long distance mass transit. However, most cars are used in cities while rural and distance travel is a small fraction so even exempting them wouldn't be a huge impact relatively speaking... many other bigger sources that need improvement.
I rented for distance anyway because it's foolish to breakdown and be stuck then have to pay for a tow and any price they want to charge you for repair. A rental gets replaced and it's their problem to fix it. Accidents are way easier too! no t
Subsidies are not ROI (Score:2)
Subsidies are not investments because they represent a coercive transfer of wealth rather than a voluntary exchange based on mutual benefit. True investment is driven by individual judgment and the pursuit of profit, grounded in the rational assessment of value.
Thus, subsidies cannot be investments; they are a diversion of resources that stifles genuine achievement and hinders the true nature of economic advancement, therefore subsidies do not have a return on investment because they are not investments, th
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I'm going to contest that view. Subsidies can and do have a return on investment. Also, coercive or not, using present resources in the hopes of getting more "something" in the future is the definition of investment and has nothing to do with the source of the resources.
If the public (or even a corporation, using revenue from one division to fund another one) uses money to support some activity, and the overall productivity of society improves, that is indeed a return on investment. And often times it is b
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He's just one of the trolls du juor. As you note subsidies are a tool that can work well or not so well depending on how it's implemented.
They ideally help a concept get off the ground in the face of entrenched, monied competition that won't change fast enough to meet the coming changes.
Musk is a putz and dangerous but he did almost singlehandedly jumpstart the EV trend in the US by buying into Tesla and making it part of his ego party. As we can see with the CyberTruck, he sucks at *actually* building an
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> Subsidies are not investments because they represent a coercive transfer of wealth rather than a voluntary exchange based on mutual benefit.
I got a $4k subsidy on my used Chevy Bolt. The money I'm not spending for gas is now being spent elsewhere in the economy. It's very likely I will have outspent the subsidy well before the car exceeds its useful life. Unless you have stock in the petroleum industry, it's still an economic win.
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So while the rich man is "investing" by using other people's money obtained through dubious means (rent seeking, wage theft, overpriced goods, exploiting loopholes), then why isn't the government also investing when it uses other people's money that was acquired through dubious means?
The company that receives the money considers these both to be investments.
A good idea prospers on its own... (Score:1, Insightful)
A good idea prospers on its own. A bad idea needs government support.
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Like universal healthcare or education.
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Except of course every other modern first world nation seems to provide more to their citizens at less cost than we do.
The sheer creativity and economic explosion this country could have if people didn't need to have a job for healthcare boggles the mind. Americans are amazing and it's a shame you want to keep the yoke of private healthcare on them.
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> Except of course every other modern first world nation seems to provide more to their citizens at less cost than we do.
Yeah, it is so good, Canadians aren't allowed — by law — to pay for their own MRIs. So, instead of waiting six months, some of them drive to Buffalo, NY, where it is possible.
> The sheer creativity and economic explosion this country could have
This country did have just that "explosion" in the 19th century, and then in the 20th. It continues to have it now.
> Americans are amazing
Oh,
Re:A good idea prospers on its own... (Score:4, Insightful)
These are good examples of social benefits that the "free market" won't invest in.
Health care and education must be organized and paid for by government.
Our "free market" medical industry is a complete failure. The US has the most expensive health care (costs 2x any other country and doesn't cover everybody) and the absolute worth health indicators of any developed country.
Education is another example where the "free market" puts people in severe debt for years.
Health care and education should be paid for by the government and free to the student or patient.
Both health care and education have a good return on investment... both for the individual and for society.
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Agreed. For me, I go to the edge cases. Solve those and we can implement many many things.
I have a friend who is Belgian. He wanted to go to state funded college but the state denied him because he didn't get good enough test scores. He worked manual jobs/factories and yet still had full healthcare and owned a nice small single family home with his family.
Similarly with healthcare...how do you deal with unlimited care needs but limited resources etc. In New Zealand, if you get breast cancer and the
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> Health care and education must be organized and paid for by government.
False.
> Our "free market" medical industry is a complete failure
Because it is not free market. Government controls it very tightly — in all likelihood for the very purpose of eventually declaring "market failure" and taking it over.
> the absolute worth health indicators of any developed country.
Another falsehood. A mistyped falsehood, I might add... Government education on display...
> free to the student or patient.
Translation: I want ot
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Like streets and roads.
just FUD (Score:2)
'By this methodology, a large electric pickup like the Rivian imposes three times the harms of a Prius... And yet "we are subsidizing the Rivian and not the Prius..."'
Yes, because "this methodology" is not meant to reflect the reason for the subsidy.
"But of course, that depends partly on how benefits were calculated:"
It sure does, perhaps you'd acknowledge that in your bad faith conclusion.
"Finally, the authors added the road deaths associated with heavier cars. Batteries are heavy, so electric vehicles
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Heavy EVs bad, so buy heavy ass SUVs and commuter trucks :-)
Wrong way to evaluate EV subsidies (Score:2)
EV subsidies were intended to jump start US manufacturing capability. So, the only important result to evaluate is whether car companies are better able to manufacture EVs after the subsidies are removed. If the answer is that the car companies can still only profitably make EVs with subsidies, then the subsidies have failed.
The article mentions that most past EV buyers would have still bought EVs even without the subsidies, so that suggests that maybe the subsidies are working. However, those past EV bu
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> The article mentions that most past EV buyers would have still bought EVs even without the subsidies, so that suggests that maybe the subsidies are working.
At the margin, there has to be a number of people who bought an EV with the subsidy but who would not have without it. Unless the supply is limited and people would have paid list price and more to get one of the few vehicles available. My impression is EVs are not that scarce.
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> there has to be a number of people who bought an EV with the subsidy but who would not have without it.
Me. Twice.
Do the new EV's replace ICE vehicles? (Score:4, Interesting)
The problem is that its not at all clear that electric vehicles replace ICE vehicles. Instead the subsidies may just get someone to buy an additional vehicle who otherwise would have gone on driving the car they already have. They trade the old car in, someone else drives it for the rest of its life and there is no reduction in emissions. So there is nothing to offset the higher manufacturing footprint of an EV.
In order to test the value of the subsidies you need to test the question of how many of the additional purchasers would have purchased a new ICE vehicle instead, absent the subsidy. If they are just encouraging added new car purchases, then there is no emission benefit.
The overall economic benefit is also doubtful since its likely the person who buys a new car would have spent the money some other way. Of course if you are an auto company or one of its workers you see the benefit. And if those workers live in Pennsylvania so do the politicians this year.
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> They trade the old car in, someone else drives it for the rest of its life and there is no reduction in emissions.
The problem here is that this person bought an old ICE car rather than a new ICE or EV car. Addressing why old cars are resold is where you might need to investigate - perhaps having a large % of the population on low wages means they can never buy a new car, so they buy pre-owned.
That means you need to wait another cycle (ten years or so?) of car ownership before these people can buy a second hand EV...
It might have made cars more expensive... (Score:1)
I have not seen anything good happen from the EV subsidies other than effectively making Tesla a major player. Maybe instead of subsidies, Tesla should have been granted a $100,000,000 grant/loan, which would have given them more freedom to develop stuff, perhaps throw more capital at once into the charger network and come out with a generation or two of EVs, than getting "paid" due to people buying their vehicles due to tax rebates.
Also, why is it just EVs? Why not have a transition time? For most inten
But who owns the companies? (Score:2)
US-based companies may have increased sales and profits. But the companies don't keep the profits, they return them to shareholders. So, were those shareholders Americans or not? And did the older subsidies, which largely went to foreign companies, eventually wind up with Americans? And did the foreign companies assemble the cars in the US or elsewhere? Curious minds want to know!
This is yet another example where attributing something to company X obscures what's actually going on. A company is a legal fict
ROI (Score:2)
How can a subsidy have a return on investment? The party providing the subsidy does not get any money back, so they have no ROI. The party getting the money has no investment, so their ROI would technically be infinite. The return for society in general can be calculated in so many ways that you can get any answer you want.
No. (Score:1)
We should be moving to walkable cities and public transportation. Except for rural communities cars and trucks as a means of transportation are ridiculous.
Stop and think about the actual cost. Not just your gas and your insurance and a taxes you pay for all the roads and the car loan payments and the maintenance. Think about the bits of tire particulate your breathing and what that does to your health and how much it's going to cost to deal with that in your '60s or all the wars we fought to secure chea
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So build a couple new Megacities where you push the plebs in the pods and then the rest of the nation can be preserved for the elite? Until you have a robot army under a dictatorship, it's not going to happen. Public transportation outside of high density cities is extremely expensive and even there it's a massive PITA. If you like city living you sometimes accept the PITA because parking and city traffic is a bigger PITA ... but it's a huge PITA regardless.
What we get out of cars is time, massive amounts o
Not pods, trains (Score:2)
and busses. Everyone goes in them. There are no "elites". We do away with them.
Google "Induced Demand". Cars are the ultimate PITA.
Suburbs can't survive. They needed tax money from the inner city because they're too spread out for their tax base to pay for roads, schools, police & fire.
We didn't get time. We lost time. Long commutes. Long hours working pointless jobs to pay for them. Some people lost all their time in our pointless wars for oil.
We can't get rid of cars because the benefi
Worth the money to reduce emissions? No. (Score:2)
There are better ways to reduce emissions than subsidizing EVs, [1]because emissions by personal transportation [ourworldindata.org] are small percentage of total emissions.
[1] https://ourworldindata.org/ghg-emissions-by-sector
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Not inside of a big city.
There cars are the main polluters!
Re: Worth the money to reduce emissions? No. (Score:2)
The residents of large cities in the U.S. don't own cars in the same numbers/ratio their suburban counterparts do... if they did, every apartment in Manhattan would have a couple parking spaces PER APARTMENT. (Note: They don't..,)
Announcing RightwingNutjob treehug credits (Score:2)
You pay me a sum of money determined by some function of how badly you want to keep living your first world lifestyle while pretending to denounce it and its technological, economic, and social predicates
And I go out in my back yard, pick a tree, and give it one big sloppy hug.
Extra $ for pix of said hug.
Extra $$ for pix of stuff beyond the hug. If internet-rando-on-vegetation is your thing. Not judging. Well...I am judging, just not judging how you blow off steam at the end of the day.
Compared to 20 million a day for 20 years (Score:2)
In Afghanistan? Yes.
At what cost? (Score:2)
> Also, the researchers estimated that for every additional electric vehicle the new tax credits put on the road, about three other electric vehicle buyers would have made the purchases even without a $7,500 credit. That dilutes the effectiveness of the subsidies, which are forecast to cost as much as $390 billion through 2031.
People have been buying cars for a century without federal subsidies, now apparently they are required?
And that number, $390 Billion? That's $390,000 Million, divide that by 390 million, and that's about $1,000 for every man, woman and child in the U.S., citizens, amnesty-seekers, migrants, etc. "... That's insane.
The subsidies don't make the cars affordable, it simply spreads $7,500 of the cost over the entire tax-paying population of the country.
Why can't car manufacturers simply be left alone to make the
Poor priorities (Score:2)
> ... subsidizing the Rivian ...
Because it's manufactured/assembled in the USA, allowing the USA to claim they're creating jobs and being climate-change responsible: Many politicians care about only one of those benefits. Also, because the USA hasn't prioritized subsidies for small-size EVs, and because consumerism in the USA requires most goods be big, and containing bells and whistles that are now, expensive, difficult to repair and enable spying.
40 years of inaction means climate-change friendly results are now more important. Tha
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The rich make the jobs though... better a dollar doing to a job maker's yacht than to a welfare queen.
Checking the news article quality (Score:2)
Checking the source quoted "Cox Automotive", they run An auto price guide (Kelly Blue Book), cars for sale listings (Autotrader), vehicle fleet management solutions, etc.
An inside the industry magazine like this has an interest in saying that more cars are better. If they said "EVs are a scam and have no resale value after 5 years", Cox Automotive's business would suffer.
Where's the question in the article of, how much of Tesla's 10 year revenue was directly due to federal and state government EV credits?
W
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What kind of sauce goes with the rich? My doctor told me to cut our rich foods anyway.
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That is nonsense. The rich do not create jobs. Corporations create jobs, entrepreneurs (who often start out poor and sometimes become rich) sometimes create jobs, the government creates jobs (even if the jobs create nothing). The rich mostly live on passive income from their money.
Re:Poor priorities (Score:4, Insightful)
> The rich do not create jobs...The rich mostly live on passive income from their money.
Not sure why you'd think that.
The vast majority of rich people got that way by starting companies. Some really rich ones (Bezos, Musk, Ellison, Zuckerberg) are still running the companies even though they could easily quit. Musk, in particular, could have stopped after he quit PayPal but no, he got involved in Tesla, Solar City, SpaceX, X, and the Boring Company. Bill Hewlett and Dave Packard, two of my favorites, were involved in running HP well past a typical retirement age.
Even the idle fools living off passive income, where do you suppose that passive income comes from? Oh right, by giving money to companies so the companies can buy tools and equipment so the people they hire can do their jobs. You can't hire without capital and that's what some rich (and lots of not so rich) people provide.
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Point taken about entrepreneurs creating jobs. But to address another part of your post:
>> The rich do not create jobs...The rich mostly live on passive income from their money.
> [...]
> Even the idle fools living off passive income, where do you suppose that passive income comes from? Oh right, by giving money to companies so the companies can buy tools and equipment so the people they hire can do their jobs. You can't hire without capital and that's what some rich (and lots of not so rich) people provide.
So ... these "idle fools" give their money to someone else who uses it to create jobs. Well okay, but forgive me if I'm not as impressed as I am with entrepreneurs who take a more hands-on approach.
And let's not forget that many of us in our retirement will hope to live off "passive income" from wealth we have accumulated doing hard work. But let's just not think we're creating jobs to the same extent as others. We'll be
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Most rich people inherited their wealth.
They didn't earn it. They didn't start companies. They didn't create jobs.
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Many big companies Musk that got Musk his money were not started by him but purchased existing companies, with leverages and partners.
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"Welfare queen"? Bad news, my friend, Ronald Reagan's dead, and his bs is rapidly dying too.
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I can only think of one EV in that price range. Most of them are affordable, the story that EVs are for the wealthy only is incorrect. Maybe they're not for the poor, but the poor also don't buy new automobiles either. Subsidies are for the middle class buyers, it's not a lot of money but it's enough to sway a decision betwen the 25,000 ICE or the 30,000 EV/hybrid.
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> I don't like the idea of subsiding cars for the rich.
The EV tax credit has income limits. Also, the current tax credit policy finally includes used EVs, so us plebs finally get to join in on the fun. In fact, it was through the tax credits and a quirk of ICE vs EV used car values that I was able to essentially make an even swap between an entry-level Nissan Versa and a Chevy Bolt.
Yes, I seriously went from a car that literally still had crank windows, to an EV that had a brand new replaced battery pack with a reset warranty due to the recall. I've got no c