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Electric Vehicles

We Should Be Talking About an EV Tax — But Not This One

The math behind a $1,000 EV fee is specious to say the least.

John Barrasso.
Heatmap Illustration/Getty Images

When Elon Musk became a major backer of President Trump last year, some in the electric vehicle camp saw a glimmer of hope. Perhaps, with the CEO of the world’s top EV maker in his corner, Trump would soften some of his anti-electric rhetoric and come around on EVs.

Musk has been the most visible member of the new Trump regime during its chaotic first few weeks. Yet even with his outsized role, the new government’s pushback against electric vehicles continues full steam ahead. On Wednesday, Republican senators introduced double-barreled anti-EV legislation: The first bill would kill every kind of tax credit for buying electric, whether new, used, or lease, as well as incentives for charging stations. The second would place an extra tax of $1,000 on all EV purchases.

The first measure is no surprise given that Trump and the GOP have railed against EV incentives for years and promised to take the country back to the good old days of oil drilling. The second is, at least nominally, an attempt to tackle a legitimate question about the transition to electric vehicles — who pays to fix the roads — albeit with a solution that’s clearly meant to punish the kind of people who want to buy an electric car.

A federal gasoline tax of 18.4 cents per gallon helps fund highway maintenance, and states add their own taxes on top of that. But EV owners don’t buy gasoline, which means they don't contribute to road repair in this way. Economists have floated various solutions to make this situation more equitable and see EVs pay their fair share. States have tried more blunt tactics, such as tacking on hundreds of dollars to the cost of an electric car’s annual registration.

The senators’ proposed fix is to slap on a $1,000 fee to every electric vehicle purchase at the point of sale. The argument is that people who drive gas cars contribute about $100 in gas taxes annually, so charging EV buyers $1,000 brings in a decade’s worth of what they should be paying.

This is an unsophisticated and antagonistic answer to a serious question. The gas tax, while imperfect, at least has the effect of charging people based on how much they drive, which is correlated with how much wear and tear they cause to the public roads. It has the bonus of incentivizing people to drive lighter and more fuel-efficient vehicles. Charging per mile is trickier to do with EVs. The government could impose some kind of tax per kilowatt-hour at public charging stations, but most owners do most of their charging at home, where there’s no simple way to charge them more for the electricity that powers their car versus the juice that’s used for the refrigerator or the vacuum cleaner.

Charging EV drivers a flat thousand bucks at the point of sale, however, forces them to pay for a decade’s worth of taxes up front, something gasoline drivers would never be asked to do. It also presumes the buyer is going to keep the vehicle for at least 10 years, and includes no provision for any other scenario. (It’s not like the government is going to refund you $500 if you sell the vehicle after five years. You’re footing the bill for the second owner.)

Not that the bill’s proponents have any problem trotting out specious math. Senator Deb Fischer of Nebraska justified the dubious tax by arguing that “EVs can weigh up to three times as much as gas-powered cars, creating more wear and tear on our roads and bridges."

This is bogus. As Heatmap has noted numerous times, EV weight is a serious matter with implications for issues including pedestrian safety and tire wear. But “three times as much” is a reach that rests on an impressive feat of cherry-picking, akin to comparing a monstrous vehicle like the GMC Hummer EV to a Toyota Corolla. Here’s a more accurate comparison: The nation’s and the world’s top-selling EV, Tesla’s Model Y, has a curb weight of around 4,400 pounds. That’s almost exactly the same as the base curb weight of the Ford F-150 — which, by the way, is the most popular vehicle in Senator Fischer’s state of Nebraska.

As usual, the only substance at play is identity politics. There is a grown-up discussion to be had about taxing EVs, and whether they ought to enjoy benefits such as federal incentives and lower taxes because of the public good they create by lowering carbon emissions. What we continue to get instead is a naked attempt to punish the kinds of Americans who want to drive electric.

On some level, it still feels weird that all this is happening alongside Musk’s public turn as de facto U.S. president. But with so much power to influence the federal government, Tesla’s CEO has convinced himself he doesn’t have to care about the state of the EV market and whether ordinary Americans can afford his cars — at least, not while he’s puttering around the Oval Office and his company is reportedly winning $400 million contracts to build armored electric vehicles for Uncle Sam.

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Bruce Westerman, the Capitol, a data center, and power lines.
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After many months of will-they-won’t-they, it seems that the dream (or nightmare, to some) of getting a permitting reform bill through Congress is squarely back on the table.

“Permitting reform” has become a catch-all term for various ways of taking a machete to the thicket of bureaucracy bogging down infrastructure projects. Comprehensive permitting reform has been tried before but never quite succeeded. Now, a bipartisan group of lawmakers in the House are taking another stab at it with the SPEED Act, which passed the House Natural Resources Committee the week before Thanksgiving. The bill attempts to untangle just one portion of the permitting process — the National Environmental Policy Act, or NEPA.

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Hotspots

GOP Lawmaker Asks FAA to Rescind Wind Farm Approval

And more on the week’s biggest fights around renewable energy.

The United States.
Heatmap Illustration/Getty Images

1. Benton County, Washington – The Horse Heaven wind farm in Washington State could become the next Lava Ridge — if the Federal Aviation Administration wants to take up the cause.

  • On Monday, Dan Newhouse, Republican congressman of Washington, sent a letter to the FAA asking them to review previous approvals for Horse Heaven, claiming that the project’s development would significantly impede upon air traffic into the third largest airport in the state, which he said is located ten miles from the project site. To make this claim Newhouse relied entirely on the height of the turbines. He did not reference any specific study finding issues.
  • There’s a wee bit of irony here: Horse Heaven – a project proposed by Scout Clean Energy – first set up an agreement to avoid air navigation issues under the first Trump administration. Nevertheless, Newhouse asked the agency to revisit the determination. “There remains a great deal of concern about its impact on safe and reliable air operations,” he wrote. “I believe a rigorous re-examination of the prior determination of no hazard is essential to properly and accurately assess this project’s impact on the community.”
  • The “concern” Newhouse is referencing: a letter sent from residents in his district in eastern Washington whose fight against Horse Heaven I previously chronicled a full year ago for The Fight. In a letter to the FAA in September, which Newhouse endorsed, these residents wrote there were flaws under the first agreement for Horse Heaven that failed to take into account the full height of the turbines.
  • I was first to chronicle the risk of the FAA grounding wind project development at the beginning of the Trump administration. If this cause is taken up by the agency I do believe it will send chills down the spines of other project developers because, up until now, the agency has not been weaponized against the wind industry like the Interior Department or other vectors of the Transportation Department (the FAA is under their purview).
  • When asked for comment, FAA spokesman Steven Kulm told me: “We will respond to the Congressman directly.” Kulm did not respond to an additional request for comment on whether the agency agreed with the claims about Horse Heaven impacting air traffic.

2. Dukes County, Massachusetts – The Trump administration signaled this week it will rescind the approvals for the New England 1 offshore wind project.

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Q&A

How Rep. Sean Casten Is Thinking of Permitting Reform

A conversation with the co-chair of the House Sustainable Energy and Environment Coalition

Rep. Sean Casten.
Heatmap Illustration

This week’s conversation is with Rep. Sean Casten, co-chair of the House Sustainable Energy and Environment Coalition – a group of climate hawkish Democratic lawmakers in the U.S. House of Representatives. Casten and another lawmaker, Rep. Mike Levin, recently released the coalition’s priority permitting reform package known as the Cheap Energy Act, which stands in stark contrast to many of the permitting ideas gaining Republican support in Congress today. I reached out to talk about the state of play on permitting, where renewables projects fit on Democrats’ priority list in bipartisan talks, and whether lawmakers will ever address the major barrier we talk about every week here in The Fight: local control. Our chat wound up immensely informative and this is maybe my favorite Q&A I’ve had the liberty to write so far in this newsletter’s history.

The following conversation was lightly edited for clarity.

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