Will plans to juice electric vehicle sales work?
Dangling tax credits and rebates in his drive to fight climate change, President Joe Biden wants you to trade your gas-burning car, truck or SUV for a zero-emissions electric vehicle.
Some buyers would find his offer persuasive. Yet Biden’s goal is a daunting one: Even if Congress approves his $2.3 trillion infrastructure plan, along with its incentives, it would take many years to replace enough internal combustion vehicles with EVs to make a huge dent in tailpipe emissions.
Right now, there are about 279 million vehicles on the road in the United States. The proportion that are fully electric, according to IHS Markit, is 0.36 percent. Of the 14.5 million new vehicles that were sold last year, 2 percent were fully electric.
Even if every new vehicle sold were battery powered — something no one envisions — it would take about 15 years to swap out the entire fleet. What’s more, cars built during the past two decades last far longer than previous vehicles, so buyers are keeping them longer. The average U.S. vehicle has been on the road for nearly 12 years.
Research shows that each EV sold does cut emissions. But it could take a couple of years for an EV to reach that point if coal is used to generate power to recharge the vehicle, said Bruce Belzowski, a retired University of Michigan transportation researcher who runs a company that studies the auto industry’s future.
“If you don’t start somewhere, you’re never going to get anywhere,” Belzowski said. “Every electric vehicle that you sell is going to be net positive for the environment.”
The Biden administration didn’t offer specifics on just how much car buyers would receive to trade in their vehicles. But it plans to spend $174 billion over eight years on EVs. That figure includes incentives for consumers, grants to build 500,000 charging stations, and money to develop U.S. supply chains for parts and minerals needed to make batteries.
“We’re going to provide tax incentives and point-of-sale rebates to all American families,” Biden said Wednesday.
The biggest incentive likely will be expansion of the electric vehi
cle tax credit, now $7,500, which is phased out after an automaker sells 200,000 battery-electric vehicles. Tesla and General Motors have exceeded the cap. Nissan is getting close.
A summary of Biden’s plan didn’t have any numbers. Democrats on the House Ways and Means Committee, though, are backing a bill that would raise the cap to 600,000. The bill also includes a tax credit of at least $1,250 for those who buy used EVs.
Jeff Schuster, president of global forecasting for LMC Automotive, an industry consulting firm, said that either the administration doesn’t yet have specific numbers or deliberately omitted them while negotiations take place among the auto industry, Congress and environmental groups.