Federal electric vehicle (EV) tax credits were created for the purpose of helping Americans buy environmentally-friendly cars at an affordable price. But the credit has failed miserably in this objective and has neither benefited the environment nor the average American.
Instead, it has only enriched Elon Musk and the privileged few.
Musk is lobbying hard to keep this bit of corporate welfare so his business can stay afloat in a market it can’t fairly compete in. Starting in 2019, Tesla is set to be phased out from the tax credit’s beneficence, and a new Senate bill aims to scrap the subsidy entirely. All of these developments are bad for Tesla’s bottom line, but good for the American people.
The EV does virtually nothing to help the environment. The tax credit is designed to spur electric car usage, but the vehicles themselves may be worse for the environment than your average sedan.
Manhattan Institute scholar Jonathan Lasser argues that more electric cars on the road would actually increase America’s air pollution due to the negligible effect the vehicles have on reducing greenhouse gas emissions and the increased drain they would have on the nation’s electric grid.
America’s electricity primarily comes from nonrenewable fossil fuels such as coal, and those sources power electric cars. Thus, their “clean” benefits are offset by their power sources.
The tax credit has proven to do little to spur middle- and working-class Americans to buy Teslas. The majority of the people who claim the EV have a household income of at least $100,000 a year, and 17 percent of the credit’s beneficiaries make over $200,000 a year.
This is clearly a tax break for the wealthy at a time when working-class people are struggling more than ever to make ends meet.
America cherishes the idea that the public, not the government, should decide what products it wants to buy. The EV violates that principle by letting the government impose a product on the free market that the public doesn’t desire.
Tesla suffers tremendously when these tax credits disappear. When Denmark and Hong Kong cut their EV credits, Tesla car registrations dropped 94 and 95 percent, respectively, in those two markets. Very few people want to buy these cars unless the government pays them to.
Unsurprisingly, for a company dependent on government generosity, Tesla is poorly run and has trouble turning a profit. Tesla recorded negative profits for seven straight quarters before posting a modest profit in the last fiscal quarter.
The company has even gone as far as to beg suppliers to return money already paid in order to artificially boost their profit margins.
Even though Tesla has trouble making money, it has no issue with spending it. A Bloomberg report states that Tesla burns through nearly $7,500 every minute — an astounding figure considering its profit woes.
Musk’s dependence on the government to survive in the market is also exhibited in the practices of his other company, SpaceX. The vast majority of Musk’s space venture enterprise come from the government, and it imposes tremendous costs on the American taxpayer, including new 50-percent price hikes, for little public benefit.
The only currently scheduled SpaceX flight is reserved for a Japanese billionaire and a few of his close pals. That doesn’t serve the American people, but it does encapsulate Musk’s business model of creating products for the elite built on the back of the taxpayer.
This sketchy business model is able to thrive all thanks to the EV tax credit. Without that government subsidy, Musk’s companies would be forced to deliver a product the public wants, or cease to exist.
The elimination of the EV tax credit is in the public’s interest. Only the elite would oppose a move that serves the average American.
Bay Buchanan served as the 37th U.S. Treasurer under President Ronald Reagan. She was a senior adviser to Mitt RomneyWillard (Mitt) Mitt RomneyGraham tries to help Trump and McConnell bury the hatchet GOP senator will 'probably' vote for debt limit increase Five questions and answers about the debt ceiling fight MORE's 2012 presidential campaign.