Conservatives Issue Dire Warning About Extending Electric Vehicle Subsidies

Conservative groups signed a letter Thursday warning a group of bipartisan lawmakers that extending electric vehicle tax credits will likely be a giveaway to wealthy people at the expense of poor Americans.

Electric vehicle tax credits “overwhelmingly benefit the rich,” American Energy Alliance head Tom Pyle and other conservative groups said in the letter to Republican Sen. Chuck Grassley of Iowa. Democratic Sen. Ron Wyden of Oregon, Republican Rep. Kevin Brady of Texas and Democratic Rep. Richard Neal of Massachusetts were also copied in the letter.

Pyle and the other signers cited a Pacific Research Institute study from 2018 showing that households with an adjusted gross income of more than $100,000 a year accounted for 79 percent of all such tax credits. “It makes no sense for the federal government to subsidize the purchases of wealthy individuals,” the letter notes.

“The American Energy Alliance has organized a coalition to proclaim in one unified voice that there should be no expansion of the misguided electric vehicle tax credit,” Pyle wrote in a statement. “There is no question that the electric vehicle tax credit distorts the auto market to no gain.”

Nearly half of new electric vehicles sales were in California alone, while only 2.7 percent of new electric vehicles were sold in Massachusetts, and only 0.3 percent were sold in Iowa, according to the letter, which cited data from market researcher EV Adoption. The disparity means that the other 49 states are subsidizing expensive cars for the Golden State, which represents 12 percent of the market.

The letter comes after Democratic Michigan Sens. Debbie Stabenow and Gary Peters introduced legislation in April that would raise the per-manufacturer cap from 200,000 to 600,000 vehicles. Tesla was the first electric vehicle company to feel the sting after the company eclipsed the cap. Tesla’s credit was halved in January, moving to $3,750 from $7,500 per vehicle.

President Donald Trump might have something to say about the legislation. The president blasted General Motors in November for laying off thousands of employees as the company prepares to ramp up its electric vehicle production.

“Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland. Nothing being closed in Mexico & China,” Trump wrote in a Nov. 27  tweet. “The U.S. saved General Motors, and this is the THANKS we get! We are now looking at cutting all @GM subsidies, including…. for electric cars.”