(TNS) — U.S. Rep. Debbie Dingell is asking a Congress that has refused to extend tax credits for electric vehicles to approve a bill that would spend $2 billion annually to encourage development and adoption of plug-in cars.
Advocates of electric cars have pleaded with Congress to do more to support adoption of EVs, but with gas prices low and consumers opting for SUVs and pickups in large numbers, lawmakers have largely sat on their hands.
Last year, Congress failed to include approve legislation introduced by U.S. Sen. Debbie Stabenow, D-Lansing, that would have tripled the 200,000 cap on the number of EVs per manufacturer that qualify for $7,500 tax credits.
Dingell’s bill is an another attempt to jumpstart the conversation in Washington, D.C., about EVs, but President Donald Trump is a noted skeptic-in-chief of the technology and has floated the possibility of eliminating all tax credits for electric cars.
The Democrat from Dearborn, Mich., said she hopes Trump will not be a roadblock for her new legislation.
"The president wants the companies to do well," she said. "The companies' product plans all have electric vehicles in them. He should be encouraging incentives that support how the companies will be competitive globally."
Dingell's legislation, known as the USA Electrify Forward Act, directs U.S. Transportation Secretary Elaine Chao to "accelerate domestic manufacturing efforts directed toward the improvement of batteries, power electronics and other technologies for use in plug-in electric vehicles."
It also directs the transportation department to update residential and commercial building codes to encourage installation of electric-vehicle charging stations and orders states to consider measures to encourage charging stations.
The bill would appropriate $2 billion each year for the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing Incentive Program from 2021 to 2035.
It's the first major electric-vehicle legislation since Stabenow's unsuccessful bill, which would have allowed automakers to offer a slightly lower tax credit of $7,000 for another 400,000 plug-in cars on top of the pre-existing cap.
In 2018, General Motors Co. and Tesla hit the lifetime ceiling of 200,000 electric vehicles, triggering a phase-out process cut the tax credit in half every six months until they hit zero at the beginning of this year.
Tesla, GM and Nissan accounted for 62% of the 1.18 million electric vehicles that were on the road as of last March, according to the Edison Electric Institute, which represents U.S. investor-owned electric companies. Carmakers sold 236,067 electric cars from January to September 2019; that was significantly down from 361,307 sold in the same period of 2018, according to the Electric Drive Transportation Association, which lobbies for policies that promote electric-drive technologies.
Dingell said other manufacturers will have to catch up to GM and Tesla on electric-car production, especially if they hope to compete internationally.
"All the companies need to move to electric vehicles," she said. "They know it and they want to do it. It's a very significant part of all their product plans."
The Dearborn Democrat acknowledged "there continues to be consumer acceptance problems," which she hopes her legislation will help to address.
"We definitely need to develop infrastructure around the country," Dingell said. "People are going to have think differently, we're going to need charging stations that do it different. People are used to pulling into a gas station and filling up in five to ten minutes."
Genevieve Cullen, president of the Electric Drive Transportation Association, is optimistic that Dingell's bill will fare better than previous attempts to increase subsidies for electric cars.
"What we know for sure is that electric transportation has broad, bipartisan support in Congress," she said, citing efforts by the Democratically controlled U.S. House to address climate change. "Congress has already demonstrated they are interested in action in this area."
Cullen said she attributed the failure of Stabenow's legislation to the fact that supporters were trying to include it in a broader spending bill that Congress was attempting to pass quickly before the end of the year.
"We've made a lot of strides, we just need to keep accelerating," she said. "Most folks (on Capitol Hill) understand that public investment is the key to us taking the lead on electric mobility."
Mike Palicz, federal affairs manager for Americans for Tax Reform, a Washington-based conservative group founded by Grover Norquist that opposes all tax increases, strongly disagreed.
"We just saw Congress reject further subsidization of electric vehicles," he said. "Fresh off the heels of that, from a taxpayer perspective, here's another bill that's trying to subsidize electric vehicles."
Palicz said most measures that aimed at subsidizing electric vehicles beyond the existing tax credits would require taking money designated for roads and transit from the U.S. Department of Transportation's Highway Trust Fund, which is funded by an 18.4 cents-per-gallon federal gas tax.
Noting that drivers of fully electric cars do not pay into the Highway Trust Fund, Palicz said "What they're doing is taking gas tax dollars that are supposed to go to roads and bridges and using it to pay for electric vehicles and EV infrastructure.
"We're talking about subsidizing what are essentially luxury vehicles," he said.
Electric vehicles have been eligible for federal tax credits under a program first established by the George W. Bush administration. The program was later expanded by the Obama administration in a bid to encourage EV development by sweetening the deal on vehicles that are typically more expensive.
Michelle Krebs, senior director of automotive relations for Cox Automotive and executive analyst for Autotrader, said there have been "mixed results" on incentives for electric vehicles thus far
"Certainly, when we look at places like Atlanta some years ago and Norway, where incentives of all sorts are hefty, EV sales certainly go up," she said. "In our EV study from last summer, people considering EVs weren’t particularly familiar with incentives. I suspect Tesla buyers and maybe some of the other buyers of luxury EVs would buy regardless of the incentives … we’ll see if that continues when Tesla incentives are totally gone."
Krebs added: "On the other hand, EVs are perceived, and in some cases, truly are, more expensive than comparable gas-powered vehicles, so as EVs move toward more mainstream audiences, affordability is an obstacle — one that might be helped by incentives."
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