Electric vehicle advocates are ramping up efforts to lobby Republicans in the new Congress, hoping to push through policies such as expanded tax incentives that have long been held up by partisan politics.
One of the industry’s main blockades is about to be removed: The Trump White House had vigorously opposed climate policies that would help electric cars, especially beefing up federal tax credits that would help consumers purchase the pricier vehicles.
President-elect Joe Biden has said restoring and expanding the tax incentives is a top priority. He is seeking to aggressively boost electric cars, key to curbing vehicle emissions as part of his climate agenda.
His climate plan promised to “restore the full electric vehicle tax credit” and ensure the incentive is “designed to target middle class consumers and, to the greatest extent possible, to prioritize the purchase of vehicles made in America.” Biden has also pledged to build out more than 500,000 electric vehicle charging stations.
He will need Congress to do it, though, and especially Republicans, given the slim margin in the House and even narrower partisan split in the Senate.
So far, there are only a handful of Republican lawmakers who have publicly backed more tax credits for electric cars.
Those include more centrist Sens. Susan Collins of Maine and retiring Lamar Alexander of Tennessee, who co-sponsored a bill last year that would expand the electric vehicle tax credits to allow more cars per manufacturer to be eligible. The current tax credits allow the first 200,000 vehicles sold by each manufacturer to qualify. Tesla and General Motors have already hit that cap.
A few GOP congressmen with electric vehicle manufacturing plants in their districts, such as Rep. Darin LaHood, whose Illinois district houses the plant for EV startup Rivian, have also said they support the tax incentives.
A larger group of conservative senators, however, has suggested plans to eliminate the tax credits or restrict them. They argue the tax credits benefit richer people already inclined to buy a more pricey electric car.
Those lawmakers also say auto manufacturers no longer need the tax credit, given how much investment is going into electric models. For example, General Motors announced earlier this month it would invest an additional $27 billion in electric and autonomous vehicles, eclipsing its investment in gas- and diesel-powered cars. Tesla has become the most valuable car company in the world, and this week, its market cap rose above $500 billion for the first time. CEO Elon Musk also surpassed Microsoft founder Bill Gates as the world’s second richest man this week.
Even so, the electric vehicle market share was just above 2% in the U.S. in 2019.
Electric vehicle advocates are hoping to appeal to Republicans with a wider tent of supportive industries and a “full system” approach to the electric car supply chain.
Earlier this month, a group of electric car companies, major utilities, and minerals producers banded together to launch the Zero Emission Transportation Association, targeting 100% electric car sales in the next 10 years. Topping the new group’s list of policy objectives is consumer incentives to purchase electric cars.
“What we’re able to do with a diverse coalition is go and telegraph the economic case throughout all of these sectors,” said Joe Britton, the group’s executive director.
By doing so, the group is hoping members of Congress in both parties “can see a win for themselves in their congressional districts because of the economic case and because of the consumer case,” he added.
Solidifying that case, electric car supporters say, is the fact that electric vehicle manufacturing is expanding outside of California. Electric car startups and legacy automakers are choosing states like Alabama, Tennessee, Ohio, and South Carolina as production hubs.
“There are in many ways very red states that are being well-positioned to produce the future of transportation,” said Ben Prochazka, national director of the Electrification Coalition, a nonpartisan group that advocates for electric cars to reduce U.S. dependence on foreign oil.
“If we set our policy agenda right, people living in those states and working in those states are going to be guaranteed jobs for the future,” he added.
Conservative free market groups and the oil industry plan to keep the pressure on Republicans, though.
“For Republicans, it’s pretty clear there’s a lot of opposition to subsidizing at a time when we’re running deficits, at a time when people are really hurting, the economy is starting, small businesses are hurting,” said Derrick Morgan, senior vice president of federal and regulatory affairs at the American Fuel and Petrochemical Manufacturers.
“Why would we want to rejuvenate a tax credit that’s overwhelmingly going to California, to the wealthy, and ultimately lining the pockets of the world’s second richest man?” he added, referring to Musk.
Opponents of the electric vehicle tax credit also say it’s a more costly way to curb emissions than other economy-wide climate policies. For example, a study by ClearView Energy Partners last year found the electric vehicle tax credits reduced emissions at a carbon price ranging from $114 to $237 per ton. Comparatively, ClearView found solar tax credits would reduce emissions at a carbon price of $17 to $52 per ton and wind tax credits at $21 per ton.
“Our message to [Biden] and his administration would be to look at all the different ways to reduce emissions and let’s pick the ones that are the most efficient,” Morgan said. “And frankly an EV tax credit is extremely far down on the list.”
Even Republicans who strongly back clean energy say many GOP lawmakers would be hesitant to extend tax credits for electric cars, especially if automaker investments in electrification start to drive down prices of the vehicles on their own. Instead, the place for Republicans to engage is on building out charging infrastructure, said Heather Reams, executive director of Citizens for Responsible Energy Solutions, a conservative clean energy group.
Republicans have already shown they’re willing to work with Democrats on electric car charging infrastructure. Wyoming Sen. John Barrasso, the top Republican on the Senate Environment Committee, is shepherding the first surface transportation bill that includes a climate section, focused on increasing investments for electric vehicle infrastructure.
Just this week, GOP Rep. Michael Burgess of Texas introduced legislation with Arizona Democrat Rep. Tom O’Halleran that would establish a $10 million grant program to help cities and utilities map locations for electric car chargers.
Even conservative Republicans who oppose tax credits and spending increases can find ways to back electric cars by removing regulatory barriers, Reams added. She said she has talked with Kentucky Sen. Rand Paul and Texas Sen. Ted Cruz about electric cars, and both mentioned regulatory red tape restricting their adoption.
“Republicans will continue to look at industry like EVs in an economic lens,” Reams said. “The more ubiquitous it becomes, the easier it is to support them, so many of these political challenges that have been there continue to fall by the wayside.”