US electric vehicle policies to cost taxpayers $7.5 bil through
2019: CBO
Washington (Platts)--21Sep2012/516 pm EDT/2116 GMT
Federal policies that promote electric vehicles, such as tax credits
or incentives for carmakers, will cost US taxpayers about $7.5 billion
through 2019, and may not result in lower gasoline consumption or
greenhouse gas emissions, the Congressional Budget Office said in a new
report.
The policies could reduce gasoline use and GHG emissions over a longer
period of time if federal fuel efficiency standards are influenced by
sales of EVs, CBO said.
The report, issued Thursday, was done at the request of Senator Lisa
Murkowski, a Republican from Alaska and ranking minority member on the
Senate Energy and Natural Resources Committee.
The Electric Drive Transportation Association, which is made up of
utilities, carmakers, battery manufacturers and others, is taking issue
with some of the analysis in the report, pointing out that the report
lists limitations because of the infancy of the EV sector.
The federal incentives examined in the report include direct loans to
carmakers or companies that manufacture parts for high-fuel-efficiency
vehicles, at a budget cost of $3.1 billion; tax credits of up to $7,500
each for buyers of EVs, at a budget costs of $2 billion; grants to
companies that make batteries or other components of EVs, $2 billion;
and grants to accelerate the introduction and use of EVs, $400 million.
In evaluating the effectiveness of the tax credits, "the report provides
the caveat that 'as yet, no reliable estimates exist of the share of
electric vehicle sales that can be attributed to the tax credits,'" said
Brian Wynne, president of EDTA.
"While we do not agree with all of the assumptions made and relied on in
the report, CBO's illustrations do show that tax incentives can help
move electric drive into the mainstream and reduce gasoline use and
emissions, while growing the industry," Wynne said in a statement.
The CBO report said the direct effect of tax credits can be reduced
gasoline consumption and fewer GHG emissions, but indirect effects
associated with corporate average fuel economy standards will limit
their impact over the next several years. The tax credits will increase
sales of EVs, hybrid vehicles and traditional vehicles with higher fuel
efficiency, boosting the average fuel economy of carmakers' fleets, CBO
said.
However, those sales will give carmakers to opportunity to boost sales
of low-fuel-efficiency vehicles and prompt car dealers to lower prices
of low-fuel-economy vehicles to compete with higher efficiency models.
"Consequently, given corporate average fuel economy standards that are
high enough to constrain automakers' production decisions, the tax
credits cannot significantly affect total gasoline use or greenhouse gas
emissions," when the standards are in effect, the report said. Those
standards extend through 2021 for fuel economy standards and 2025 for
emission standards, the CBO said.
--Tom Tiernan, tom_tiernan@platts.com --Edited by Carla Bass,
carla_bass@platts.com
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