No Need for Biden’s Electric Vehicle Subsidies

Chris Edwards

President Biden’s infrastructure plan includes $174 billion in subsidies for electric vehicles and charging stations. That would be a waste of taxpayer money because businesses are already pouring billions of dollars into EV research, production, and infrastructure, as noted here.

There are already tens of thousands of EV charging stations across the country in places such as Target parking lots. As businesses continue to invest, EV prices will likely come down, performance will improve, more EVs will be bought, and more charging stations will be installed by businesses. There is no need for further government subsidies.

A Wall Street Journal news piece on the weekend drove the point home. It reported on the wave of new consumer interest in EVs as quality improves:

“Hundreds of thousands of consumers have preordered either the Hummer EV, the electric pickup truck from U.S. startup Rivian or Tesla’s Cybertruck. More have expressed interest in electric SUVs such as the Toyota bZ4X and Mercedes‐​Benz EQB, and electric versions of pickups such as the Ford F-150 and Chevy Silverado, a close relative of the Hummer. These vehicles are advertised with promises of long battery range, high towing capacity, all the extras typical of midrange luxury vehicles—and hardly a mention of their eco‐​friendly bona fides.”

The Journal piece points to a survey that consumer interest in buying electric vehicles is rising in many countries. The share of Americans who say they would be willing to buy an electric vehicle increased from 34 percent to 51 percent in just the past year.

Google data show “consumer searches for electric trucks and SUVs have recently hit a high point after trending upward for years.” Analysts at Edmunds “anticipate that 30 EVs from 21 brands will become available for sale this year, compared to 17 vehicles from 12 brands in 2020.”

Analyst Diane Katz has a more skeptical view of EVs here, and it also true that EV sales were soft in 2020. But EV sales are expected to rise strongly going forward, and the number of charging stations will continue to increase as electric utility firms get into the business. EVs appear to be the future, but we should get government out of the way so that businesses must lure consumers to them with price reductions and higher performance, not subsidies.