Electric cars are nothing but taxpayer-subsidized toys for the one percenters
Twenty years ago, in May 1995, I had my first op-ed published in a major newspaper, the Los Angeles Times. The title was Pull the Plug on the Electric Car Mandate. In that column, I pointed out that battery-powered (non-hybrid) electric vehicles (EVs) were not ready for wide-scale adoption for a variety of reasons, including their high cost and inferior characteristics compared to regular internal combustion vehicles of the day.
I also observed that there was a distinct possibility of aggravating environmental problems rather than easing them, as the EVs of the day used lead-acid batteries and could increase ambient air lead concentrations, which was still a significant issue at the time. I argued that “Parking pricing, roadway pricing and mass-transit privatization are the lowest-cost and most equitable solutions to the air pollution problems we face today.”
Sadly enough, I am writing essentially that same op-ed today. Rather than learn a lesson from government’s previous attempts to force its favoured technology onto a complex, international market, policymakers in the United States have doubled, tripled and quadrupled down on the idea, and they have, in virtually every metric of success, failed dismally.
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Back in 1990, the California Air Resources Board had mandated that two percent of the California vehicle fleet go electric by 1998, climbing to 10 percent by 2003. By 1995, when I wrote that op-ed, it was obvious that the government would never meet those targets (and indeed, GM only manufactured a little over 1,000 of its EV1s, the only mass-market battery electric available). In 2009, U.S. President Barack Obama set his own EV target of having one million electric vehicles on the road by 2015. It’s equally clear that the federal government won’t reach that target despite making large purchases of the cars for government fleets: the Obama administration quietly eliminated their fleet acquisition target in March.
What do I have against electric cars that motivates me to write negative articles about them for 20 years? Not a thing. If a person wants to buy a luxury car, without subsidies from the less well-off, without subsidized charging stations, and without government grants, loans or mandates, more power to them! If they can actually find a legal place to enjoy the rush of acceleration that EVs are famed for, good on them!
The problem is, that’s not usually what happens. Instead, lavish subsidies from state and federal governments enable a tiny cadre of wealthy eco-warriors like Leonardo DiCaprio to ostentatiously drive his Tesla to the Academy Awards at the expense of less fortunate taxpayers. They allow Tesla Motors to exist not by selling cars at a profit but by claiming Zero Emission Vehicle credits and selling them to other car companies that pass the cost onto regular car buyers.
So, on this 20th anniversary of my first major op-ed, I’ll celebrate by repeating the obvious. First, government bureaucrats cannot pick winning technologies. They lack knowledge of consumer preferences, as well as knowledge of the specific desires of time and place that only markets can discover. They claim to understand that, yet the technology mandates (often dressed up as “performance standards”) just keep on coming. Second, the technology to produce an all-electric vehicle that rivals the performance and price of regular internal combustion engines did not exist in 1995, nor in 2005, and it still doesn’t exist in 2015. Third, it’s just as unfair now, in 2015, to rob poor Peter to subsidize rich Leo’s purchase of a wealthy guy’s toy.
How can anyone justify the U.S. federal government, for example, giving someone $7,500 in tax credits to buy a $70,000 (plus) Tesla hotrod? How does California justify dumping another $2,500 subsidy and then privilege these cars to ride on HOV lanes as single-occupant vehicles? How do you justify forcing condominium associations to install EV charging stations at the whim of one EV owner when costs are going to be shared by others?
And that’s only a small slice of the handouts bragged about on the Tesla Motors website.
Some will claim an environmental rationale, but that’s silly: the economics make it impossible to deploy them at a scale that would significantly reduce either conventional air pollutants or greenhouse gases, and that’s assuming you had the wind and solar power online to charge them.
Ten percent EV mandates and million-car EV mandates are just as silly now as they have been for 20 years. It’s time, again, to pull the plug on EV mandates, subsidies, and fleet acquisition targets. Let them compete in the luxury market as other luxury car makers must.
Kenneth P. Green is Senior Director of Natural Resource Studies at the Fraser Institute.
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