There’s a vast, monumental difference between wanting something and actually buying something. I’d love a nice beach house, but, I don’t have$500k+ sitting around for a place I’d used every couple of weeks for a day or two. There’s also a significant difference between wanting something and being forced to get that thing, especially when it is pretty far out of your budget
If I moved to Norway — it’s a wonderful country to visit — one of the first things I’d probably do is run out and buy an electric car.
Why? Two reasons: First, gasoline costs the equivalent of about $7.86 a gallon, and second, the government tosses huge tax breaks at citizens to do so.
Just one giveaway alone makes it worthwhile: An exemption from the 25% value-added (VAT) tax on new car purchases. There’s also no import tax; no emission fees; no fuel taxes; cheaper insurance; and on and on. How could you not buy one?
Because they are pretty darned expensive and inconvenient for America. If you have to add huge numbers of taxes and fees to force people to purchase them, doesn’t sound like they really want them.
But it’s artificial. Manipulating the market with these things — extortion-level fuel prices and giant tax giveaways — isn’t a sign of true demand. What would consumers do if such sticks and carrots didn’t exist?
Perhaps a bit more impressive is the surge we’ve seen here in the United States from consumers who are buying EVs on their own, despite far lower gasoline prices and tax breaks that, while attractive, don’t equal what’s dangled before our Norwegian friends.
Pew Research Center data says that while 7% of U.S. adults report owning an electric or hybrid vehicle now, nearly two-fifths — 39% — say they’re “very” or “somewhat likely” to seriously consider buying an electric vehicle the next time they’re in the market for some new wheels.
Considering isn’t actually buying. I’d consider getting an iPhone next time. I won’t actually get one, but, I’d consider it. Lots of people consider things, they just do not move forward. Lots consider the hybrid versions, but, then go with the regular. And, while hybrid buyers are hot to trot consider buying (from the Pew survey)
Just 7% of U.S. adults say they currently own an electric or hybrid vehicle. Most of these owners (72%) say they are very (43%) or somewhat (29%) likely to seriously consider an electric car or truck the next time around.
It doesn’t mean they will
By the way, if you’re thinking about buying a Tesla TSLA, +2.29% or General Motors GM, -1.43% EV, it looks like you won’t get any federal tax credits. That’s because both automakers are being punished for their success: Once a manufacturer sells 200,000 units, EV tax breaks go away, and both automakers have passed this cap (this tells me that Tesla CEO Elon Musk and GM’s Mary Barra need to hire some better lobbyists and get those tax breaks restored).
That’s always been that way.
In fact, there’s evidence to show that even if these less-than-Norwegian tax breaks went away, sales could collapse. At least that’s what happened in Georgia a few years back when lawmakers ended the state’s $5,000 state tax credit. EV sales crashed 89% in two months.
So people won’t buy without tax incentives? Which do not equate to actual cash, just a reduction of your taxable income.
In a May “fact sheet,” the White House said the administration will “support market demand” for EVs with “point-of-sale incentives that encourage EV deployment.”
Translating this to simple English, it sounds like it’ll take $100 billion in subsidies to support market demand. The president proposes to use dollars from Taxpayer A so Taxpayer B can buy an electric car. This isn’t real market demand, of course; it’s artificial, as it is in Norway. Is this the right way to go? It’s quite a debate.
Do we really need tens of billions in tax breaks for people to buy an electric car? If U.S. automakers can build electric cars that can compete with foreign rivals on price and performance — and I believe they can — then perhaps the president could save taxpayers a bunch of money, and we could still move toward the future the president envisions.
The majority of those tax breaks will benefit the corporations and upper middle class/rich folks. Regardless, the unero numero problem here is that China Joe and his Democrat Party Comrades aren’t just going to attempt to incentivize EVs, they’re going attempt to force people to buy them and out of their fossil fueled vehicles.
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