Texas electric vehicle program under scrutiny for subsidizing the rich


(The Center Square) – A Texas program that provides millions of dollars in taxpayer-sponsored rebates for new electric vehicle purchases is under scrutiny for subsidizing wealthy people who buy luxury cars. An analyst calls for the end of the program.

One person received a $2,500 rebate under the program after purchasing a Porsche 918 Spyder, a limited-production hypercar with a base price of $845,000. This car, which has a top speed of over 200 mph, has a range of just 12 miles in all-electric mode, according to the US Environmental Protection Agency.

Another Texas resident was reimbursed $2,500 for the purchase of a Karma Revero GT. The 2021 version of this sports car has a sticker price of between $144,800 and $152,800, according to Edmunds. Other cars purchased under the program include 12 BMW i8 electric sports cars, a Land Rover Range Rover and other luxury vehicles.

Nearly 20% of the $14.3 million in grants awarded under the state’s Light-Duty Purchase or Lease Incentive Program went to luxury car buyers. Buyers of vehicles from luxury automakers Audi, BMW, Cadillac, Jaguar, Land Rover, Lincoln, Mercedes-Benz, Porsche and Volvo received combined rebates totaling $2,784,528. This is 19% of the total amount of grants awarded under the 2014-2021 program.

Studies show that those who are likely to buy an electric vehicle have a median annual household income of $95,000. BlastPoint, a data analytics company in Pennsylvania, reported that its research found that about 25% of likely EV buyers have annual household incomes over $150,000 per year.

The median household income in Texas in 2020 dollars from 2016 to 2020 was $63,826 according to the US Census Bureau. According to the Kelley Blue Book, the median price for a new electric vehicle as of November 2021 was $56,437, approximately $10,000 more than the industry average new vehicle price of $46,329.

According to the Texas Commission on Environmental Quality, the rebate program awarded more than $14.3 million in taxpayer-funded rebates to people who bought or leased 5,931 vehicles from 2014 through August 2021. Texas has more than 22 million registered vehicles, according to the Texas Department of Motor Vehicles.

“The nearly 6,000 vehicles purchased as part of the TERP [Texas Emissions Reduction Plan] have done nothing to measurably improve air quality in Texas cities,” said Brent Bennett, policy director for Life:Powered at the Texas Public Policy Foundation. “Our emissions are so low that our air is almost in a natural state, with weather being by far the biggest contributor to air pollution. In fact, air quality in Texas cities remained nearly unchanged during the 2020 COVID-19 shutdowns, even as vehicle miles traveled fell by almost 50%. Improvements in emissions control technologies and fuel efficiency do far more to improve air pollution than subsidies for electric vehicles.”

Bennett said lawmakers should scrap the rebate program.

“Our legislators need to recognize that the vehicle rebate program in TERP serves no useful purpose,” he said. “Many of the rebates go to luxury vehicles where the rebate is clearly not a driving factor in the purchase. Texas would be better off dissolving the program and getting rid of the vehicle registration fees that fund it.”

The state’s Light-Duty Purchase or Lease Incentive Program provides rebates of up to $5,000 for people who buy or lease new vehicles that run on compressed natural gas or LPG and up to $2,500 for people who who buy or lease new electric vehicles. Under the rules of the program, only people who buy or lease new vehicles from a dealer are eligible for the discounts. The program has no price cap on vehicles that are eligible for rebates, and the top-selling electric vehicle models in the United States that are manufactured by Tesla do not qualify for the rebate program because Tesla does not have dealers. The program also has no income limits for buyers.

According to a. to buyers of a handful of lower-cost electric vehicles report by the Texas Commission on Environmental Quality, which directs the program.

The Nissan Leaf, one of the cheapest electric vehicles for sale in the United States, accounted for 1,416 rebates totaling $3,064,645. The second most popular was the Chevrolet Bolt EV, which accounted for 758 discounts totaling $1,895,000. This was followed by the Chevrolet Volt which, according to records, accounted for 663 rebates totaling $1,640,000 from 2014 through August 2021. These three models alone accounted for $6,599,645 in discounts, or 46% of the total discounts from 2014 through August 2021.

Texas State Senator Brian Birdwell, R-Granbury, was the author of Senate Bill 1731 in 2017, the most recent bill that made changes to the state’s Light-Duty Purchase or Lease Incentive Program. HW Dickey, Senator Birdwell’s chief of staff, did not respond to emailed questions about the program or its use.

State Representative Morgan Meyer, R-University Park, who sponsored the 1731 Senate bill, did not respond to multiple calls to his county office for comment on the stimulus program.

The Lone Star Chapter of the Sierra Club of Texas, which supported the Senate bill in 1731, also did not respond to a request for comment on the state program.

Senate Bill 5 created the Light-Duty Motor Vehicle Purchase or Lease Incentive Program in 2001, but the statewide incentive program was not funded until 2014 after a legislative revision. It then phased out and lawmakers reinstated it later in 2017, according to the Texas Commission on Environmental Quality.

“Over the past decade, the Light-Duty Purchase or Lease Incentive Program (LDPLIP) has played a role in dramatically improving air quality in Texas,” the agency said in a statement, citing a report. “Emissions from mobile sources – including light commercial vehicles – are the largest contributors to ozone pollution in most urban areas. However, Texas (like most states) lacks the power to regulate emissions from mobile sources. To combat cellphone emissions in light of this federal preventive measure, the Texas legislature created the Texas Emissions Reduction Plan, or TERP, a voluntary program that provides grants to provide cleaner alternatives.”

That report did not elaborate on the specific role the Light-Duty Purchase or Lease Incentive Program played in improving air quality. The report listed the number of vehicle rebates issued through the program.

“It is impractical, if not impossible, to quantify emissions reductions attributable to LDPLIP incentive grants, individually or collectively,” the agency said. “The program encourages greater use of vehicles that run on electricity or an alternative fuel in Texas. While increased use of electricity or alternative fuels for transportation may have positive impacts on air quality in the state, the program does not quantify emission reductions for each grant awarded.”

Most US states have similar rebate programs.

At least 47 states and the District of Columbia had EV support programs through supporting infrastructure, legislation, or financial incentives for the purchase of EVs or EV utility equipment as of July 2021, according to the National Conference of State Legislatures.

Oregon has a similar program to Texas, but with some differences.

The Oregon Department of Environmental Quality’s Oregon Clean Vehicle and Charge Ahead rebate programs are offering up to $2,500 towards the purchase or lease of a qualifying new electric vehicle. Low- and middle-income residents can receive up to $7,500 for qualifying new or used EVs.

In New York, the Charge NY program offers electric car buyers a rebate of up to $2,000 for new vehicle purchases or leases, according to the New York State Energy Research and Development Authority.

In addition to government incentives, EV buyers can also receive federal rebates. All-electric and plug-in hybrid vehicles purchased new in 2010 or later “may be eligible for a state income tax credit of up to $7,500. The loan amount depends on the capacity of the battery powering the vehicle,” according to the US Department of Energy and the US Environmental Protection Agency. Under the federal program, the 2015 Porsche 918 Spyder could qualify for up to $3,667 in credit, according to the federal website.

In 2021, Congressional Democrats and President Joe Biden proposed increasing EV tax credits to as much as $12,500, including a $4,500 incentive for US-assembled, union-made vehicles, Reuters reported.

Republicans have pushed back on those plans. “Given that only the wealthiest 1% of Americans drive electric vehicles, the committee should focus on more pressing issues,” US Rep. Fred Upton told the energy subcommittee in March.

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