Reply To: New Tax Credit Bill

Aptera Community Aptera Discussions New Tax Credit Bill Reply To: New Tax Credit Bill

Aptera Community Aptera Discussions New Tax Credit Bill Reply To: New Tax Credit Bill

  • Joshua Rosen

    September 21, 2021 at 8:07 am

    Protecting special interests does nothing to increase adoption of EVs, in the long term it hurts because rather than allowing the market to pick the winners and losers the government is and the market always does a better job.

    EVs are going to happen because they are a superior technology and in the next few years they will become cheaper than ICEVs because once battery costs drop below a certain threshold, LFPs might already be at that point, everything else in an EV is cheaper. An electric motor is two orders of magnitude simpler than an internal combustion engine and as a result they are already much cheaper. EVs don’t need a complex transmission, just a single reduction gear, that’s a big savings. They don’t need catalytic converters which are boxes filled with platinum, in my last ICE the replacement cost for the catalytic converters would have been $3500, that’s a big cost that you don’t have. AWD is trivial to implement in an EV, it’s complex in an ICEV which is why you only see it on expensive ICEVs. The cost of ownership is less because all of those things that an EV doesn’t have are things that can’t wear out because if they aren’t there then there is nothing to fail.

    LCDs didn’t need government help to replace CRTs, as soon as they became affordable they pushed CRTs out of the market. PCs didn’t need government help, the first ones were expensive but within a few years everyone had one. Cell phones were very expensive at first, within a few years everyone had one, the feature phones replaced the basic phones followed by the semi-smart phones like the Blackberry and the Palm which in turn were replaced by smart phones like iPhone and Android. Most of the population on earth has a smart phone now, all done without government subsidies.

    I’m not convinced that the current tax credit did much to create the US EV market. Tesla used up most of it’s credits on the Model S and X which both cost over $100K at the time, I doubt they would have sold one fewer S or X if the tax credit wasn’t there, people who can afford $100K for a car aren’t looking for deals. The Chevy Volt undoubtedly did benefit from the tax credit because the tax credit was enough to push it into an affordable price category. But even there they would have sold most of them without the credit, I bought one in 2016 and I appreciated the fact that the the combined state and Federal credit brought a 41K car down to 31K but the car I was comparing it to was the Audi A4 which cost $50K so even if I didn’t get the credit I would have bought it. Today the top selling EVs in the US are the Model 3, Y distantly followed by the Bolt, none of which are eligible for the credit. People are buying them on their own merits.