There is growing consensus in the auto industry, the Biden administration and among Democrats in Congress that electric vehicles are critical to both the future of American manufacturing and to cutting U.S. greenhouse gas emissions. But obstacles to getting average Americans to buy EVs remain substantial.
A recent Pew Research Center survey found that only 7 percent of U.S. adults “currently have an electric or hybrid vehicle” although 39 percent “were very or somewhat likely to seriously consider buying an electric vehicle” as their next vehicle purchase. According to International Energy Agency data, U.S. EV adoption rates are far lower than in China or Europe as the U.S. has just 17 percent of the world’s total of 10 million EVs while China has 44 percent and Europe 31 percent.
Even more concerning, U.S. EV and plug-in hybrid sales have fallen in recent years, in part because of the phaseout of federal tax credits on many popular models that Congress must now renew. Around 231,000 all-electric vehicles were sold in the US last year, down 3.2 percent from 2018. Over the last three years, EVs have been only about 2 percent of the U.S. new-car market.
But to truly jumpstart the U.S. EV market, Congress must focus its policies around stimulating EV adoption by the broadest swath of the American public possible to stimulate rapid electric vehicle growth and to excite popular support for the clean energy economic transition. Put another way, Congress must democratize electric vehicles, making them the 21st-century equivalent of the Model T: A car everyone can afford. Doing this is the key to sustaining political momentum behind the broader clean energy transition envisioned by President BidenJoe BidenSocial media making political polarization worse: report Biden and UK’s Johnson to meet for talks this month: report Toyota, Honda knock union-made EV incentive in Dems’ spending package MORE and supported by Democrats. It will also foil hypocritical but potentially damaging Republican plans to caricature clean energy incentives as elitist.
Congress should start democratizing electric vehicles this week when the Ways and Means Committee begins to take up major electric vehicle tax policies. First, the House should increase consumer incentives for lower-priced vehicles, especially those under $40,000, to $10,000 from the currently proposed $7,500, while ending incentives altogether for vehicles costing more than $70,000. Movement toward this more progressive approach was evident when the Senate Finance Committee this summer passed tax credits that would be available only for cars with a sticker price of under $80,000, but more should be done.
House tax writers should then turn the incentive into a point-of-sale rebate instead of a tax credit. This will provide a much stronger incentive for the purchase of vehicles especially by lower-income motorists, many of whom do not have tax liability. At the very least, Congress should make the tax credit refundable instead of a non-refundable tax credit.
Congress should also substantially increase monetary incentives for “trading in” qualified gasoline-powered vehicles to turn over the fleet more quickly and provide stronger impetus for lower-income consumers to choose EVs, and it should extend the home fueling installation tax credit.
For commercial vehicles, the House Ways and Means Committee should adopt legislation introduced by Rep. Don Beyer (D-Va.) to provide a 30 percent tax credit for the purchase of zero-emission commercial vehicles from delivery vans to heavy-duty trucks. This measurable will not only quickly ramp up demand for EVs and create new assembly lines in US factories, it will also familiarize millions of Americans who drive for a living with the performance benefits that electric vehicles exhibit, including better acceleration and lower maintenance costs.
And of course, Congress should prioritize the deployment of at least 500,000 fast charging EV fueling stations, a down payment of which currently resides in the bipartisan infrastructure bill the Senate passed last month.
For its part, the Biden administration must quickly promulgate government contracts to fulfill the president’s sweeping climate change executive order for federal agencies to purchase more electric vehicles and deliver on the president promise to “stimulate clean energy industries by revitalizing the federal government’s sustainability efforts.”
Other than the purchase of a home, cars are the single most important personal purchase that most Americans make. And while important investments in public transportation must and will be expanded under legislation to be considered this fall, for many Americans car ownership continues to be a central part of the American dream. Indeed, it is through the ownership of vehicles that most Americans interface most personally with energy as consumers.
Electric vehicles are where support for the clean energy transition will be won or lost in the hearts of average Americans. And they are place Americans increasingly concerned about the climate crisis can make a difference through their own actions. The good news is that electric vehicle technology is simply amazing. EVs are far faster, cleaner and cheaper to operate than gasoline-powered cars when supported with the right policies. It’s time for Congress to put these vehicles within reach of the millions of middle-class and working-class Americans who can benefit from them.
Paul Bledsoe is strategic adviser at the Progressive Policy Institute and a professorial lecturer at American University’s Center for Environmental Policy. He served as a staff member in the House of Representatives and Senate Finance Committee, as well as at the Interior Department and on the White House Climate Change Task Force under President Clinton.