Proposed EV Tax Credits = Braindead Economic Policy +Last Thing the Booming EV Industry & EV-Hungry Consumers Need

Everyone loves more free money. But EVs can stand on their own four wheels, so to speak. Let competition force innovation on automakers.

By Wolf Richter for WOLF STREET.

In my entire lifetime, there has never been so much dynamism and innovation in the previously oligopolistic auto industry. EVs have shaken up that industry. EVs need to beat ICE vehicles on their own, and they’re doing that. But it takes a while because you cannot turn an entire manufacturing industry upside-down overnight. Now comes Congress to muck it up.

I won’t even get into the ridiculous provisions in the proposed EV-incentives bill that discriminate based on whether or not an automaker has a unionized workforce. I’ll just swat that asininity aside with disdain.

It’s as if the authors of the bill were trying to distract the mainstream media from the much more important and totally braindead economic policy in the bill: Piling on government incentives via tax credits on an already red-hot industry that is already planning to invest hundreds of billions of dollars to compete and bring EV prices down, amid red-hot demand from overstimulated consumers chasing down new vehicles no matter what the price, amid red-hot inflation and historic inventory shortages.

EVs are a great technology and are cheaper to produce then ICE vehicles except for the battery, but now, with enormous investments over the past decade, battery technology is coming along nicely, performance is more than adequate, prices have come down hard, while prices of ICE vehicles have shot up, and consumers have turned the corner on EVs.

EVs don’t need incentives. They need cut-throat competition from new and legacy automakers globally, and that’s happening. Tesla and GM have already run through the original $7,500 per vehicle tax credit, and they’re doing fine without it. The other automakers are going to run through those tax credit once they crank out over 200,000 EVs. And that should be it.

From that point forward, automakers and battery makers need to compete on their own in a life and death struggle to develop the best and lowest-cost technologies that consumers want, and those that cannot compete will fall by the wayside. Innovation thrives under these pressures.

As if to purposefully screw up the new dynamism in the auto industry, the EV incentives bill, to be voted on by the House Ways and Means Committee on Tuesday as part of the $3.5 trillion spending bill, would create tax credits totaling up to $12,500 per new EV, as long as the price tag doesn’t exceed $55,000 for a car and $74,000 for a truck. Yup, the taxpayer is getting shanghaied into saving the luxury buyer some money.

This bill would:

  • Make permanent – and revive for Tesla and GM – the original tax credit of $7,500 per new EV for all automakers.
  • Add a new tax credit of $4,500 per new EV for unionized automakers.
  • Add a new tax credit of $500 for using US-manufactured batteries.
  • Creating a new tax credit of up to $2,500 for used EVs.

The total tax credits for new EVs made by unionized automakers would be $12,500. The total for Teslas, Toyotas, etc. would be $8,000.

If you buy a Ford EV, you’d get $12,500 in tax credits. If you then sell the EV to your niece, she’d get another $2,500. Taxpayers would be out $15,000.

Let’s get this straight: The shift to EVs isn’t going to boost manufacturing jobs; instead, it’s going to slash manufacturing jobs because EVs are a lot simpler to manufacture. The entire ICE powertrain manufacturing segment will be gutted, to be replaced by a much smaller number of jobs in the EV industry. That is the nature of technological development. Incentivizing EVs will incentivize the auto industry to shed jobs.

The EV industry is rocking and rolling. Tesla forced it on the legacy automakers, and they have finally responded. Well-funded startups have sprung up in the EV space. All kinds of new and exciting EVs have already come and are coming on the market. This is the most exciting time in the auto industry in my lifetime. No tax credits needed to drive this forward.

EVs are already competitive when purchase price and operating costs are put together, and they’re getting more competitive, a process that is now forced on automakers by competition. If left alone, automakers will come up with EVs that blow ICE vehicles out of the water to where buying an EV is a no-brainer. That’s the goal. Competition will force that.

But tax incentives, by soothing the pain of competition, will take the pressure off and reinforce self-satisfied oligopolistic behaviors.

Automakers, like any company, charge the maximum price consumers are willing to pay. The competition is ICE vehicles. Most of the tax credit would simply cause automakers to raise EV prices to the maximum consumers would be willing to pay, given the tax credits. This is the automaker enrichment act.

Now imagine this: Is a Republican Congress then going to create a $12,500 tax credit for ICE vehicles? How about a $12,500 tax credit for diesel pickups? Get it? Everyone loves free money. And these braindead incentives go both ways.

This is just another free-money program for people who don’t need it. If you can afford to buy a $74,000 truck, you don’t need free money from the rest of the taxpayers, to whom this free money is not free.

The economy is already the most monstrously overstimulated economy ever, and inflation is red-hot, and the last thing this economy needs is more free money to buy more things that are already in short supply.

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  158 comments for “Proposed EV Tax Credits = Braindead Economic Policy +Last Thing the Booming EV Industry & EV-Hungry Consumers Need

  1. MCH says:

    Wolf, as long as they get rid of the union clause, I think I might consider finally buying an EV… from Tesla that is. Although there is a danger considering no one knows for sure about its future.

    Although I’m surprised that you are surprised, you didn’t think the bills coming out of the dome was suddenly going to be rational or not some kind of payoff, right? Or didn’t get larded down with pork. Just like how it goes in Dr. Feelgood.

    “Cops on the corner always ignore
    Somebody’s getting paid
    Jimmy’s got it wired, law’s for hire
    Got it make in the shade”

    Switch a few words, and you have the perfect description of Congress.

    • Wolf Richter says:

      Not surprised. Just doing my job swatting at an idiotic economic policy that is right in my bailiwick (auto industry).

      • MCH says:

        Heheh, you know, it isn’t idiotic policy from a certain point of view. It’s very sound policy with the aim of lining the pockets of the lawmakers, their supporters and whoever paid them off to get this thing written in the first place. Its doubtful that these so called lawmakers even read the bill much less do any real writing.

        The only certainty is that more than a few of the esteemed lawmakers and their pals will be ready to buy call options in F, GM, TSLA, NKLA and so forth. And the funny thing is, it’s not illegal.

        And you know the best thing of all for these people, they get to go on TV and tell people how they are helping to create green energy jobs and make people fawn all over them. By the time, reality hits, they will have moved on to the next set of virtue signals to be lapped up by a complicit media.

        It’s laughably corrupt, and the worst of it all is that these same people then turn around and preach about how other countries and leaders are corrupt.

        • COWG says:

          Been doing it forever…

          Wasn’t there a bill a few years ago from the Detroit mafia in Congress giving a one year depreciation if you bought a Hummer or other large vehicle…

        • TimTN says:

          This is exactly my first thought. Those political donations aren’t for nothing!

    • Confused says:

      You might want to watch the YouTube video by TFL Cars about the cost and hassle of getting a Tesla fender repaired.

    • Bobber says:

      Didn’t they pass a law saying no new ICE vehicles could be sold after a certain date? If so, isn’t that the only EV incentive that is needed? Why must there be monetary incentives on top of that?

      • DawnsEarlyLight says:

        Because it’s always about the money. The rest is just Fluff!

      • Thomas Roberts says:

        There is no official law, the white house is trying to negotiate with automakers to ensure…

        By 2030, 50% of all new passenger cars and light trucks sold in 2030 must be zero-emission vehicles, including battery electric, plug-in hybrid electric or fuel cell electric vehicles.

        This could change at any time.

    • General Strike says:

      It’s called corporate welfare, I mean capitalism, I mean, well, what’s the difference ?

    • Randy says:

      The table is tilted folks. The game is rigged and nobody seems to notice. The owners of this country the Real owners will get it all from you in the end. Its a big f**king club and you and I aint in it. Its the same club they beat you over the head with each day.

  2. Engin-ear says:

    Thanks for the report.

    I tried EVs several times, did’t see much difference in driving experience compared to ICE with automatic transmission. I did not like at all handling dirty and cold charging cable in winter though.

    I am much more impressed by selective ICE bans (existing and coming) than by EV fiscal incentives.

    The only innovatioln I see in EV is the chemistry of the batteries, everything else is a packaging of existing techs.

    I don’t quite see what EV will change in competition level in the automotive market. Adding EV and banning ICE will not change the product diversity.

    EV will shake the automotive value chain, but I am unable to predict the outcome.

    Wait-n-see…

    • Wolf Richter says:

      Engin-ear,

      “…only innovatioln I see in EV is the chemistry of the batteries, everything else is a packaging of existing techs.”

      “Existing techs” sure, or maybe, but not in cars.

      At least look at their regenerative braking system, which captures energy from braking (in ICE vehicles, energy from braking dissipates as waste heat) by turning it into electricity to charge the battery with. This is one reason why EVs are so efficient in urban driving. Electric motors with power equivalent to 400 hp can brake the vehicle in most situations except for the last few feet when you need the actual brakes. Or go down a mountain pass and arrive at the bottom with the battery fuller than it was at the top. Then use that energy recaptured by the regenerative braking system (the motors) to drive many miles for free. Now try to that in your ICE vehicle.

      • Anthony A. says:

        The regenative braking concept has been around for quite a long time.
        It’s not new (from Wiki):

        “The idea of a brake that could take the kinetic energy it absorbs and turn it into potential energy for later use has been around since the late 1800s. Some of the early attempts of this technology were to install spring type RBS on front wheel drive bicycles or horse-drawn cabs.[5][6]

        The Baku-Tbilisi-Batumi railway started applying RBS in the early 1930s. This is one example of early using of this technology in railway system.[6]”

        • Wolf Richter says:

          Anthony A.,

          Read more carefully what I wrote:

          ““Existing techs” sure, or maybe, but not in cars.”

          You don’t have regenerative braking in pure ICE vehicles because they don’t have electric motors to do the braking.

        • COWG says:

          I used to have a little thingy on my bike 50 years ago that the tire spun and ran the light…

          And yet everybody is so smart today…

        • Anthony A. says:

          Sorry Wolf, I misunderstood your point in that post.

        • Thomas Roberts says:

          Engin-ear,

          A big part of the appeal of EV’s is that there is far fewer parts in them and almost the entire drivetrain is gone, this means that they will work far more reliably and take very little to keep going. No oil changes and very little breakdowns. Because the body of EV’s is typically made from carbon fiber and there is no exhaust system, they will also be far more resistant to rust. No gas bills and minimal repair bills will also make EV’s more predictable in costs, you mainly pay for the car itself and insurance, unlike a gas car, unexpected maintenance bills won’t suddenly hit you. While Tesla cars can be hard to have the body fixed, in general EV’s should be far easier and quicker to have fixed.

          As far as driving them goes, right now there isn’t a big difference, but in the future, there could be a small electric magnetic motor and brake combo for each wheel, that can give the car superior handling and All wheel drive as standard. During the summer, some EV’s might let you default to Rear wheel drive (only use back 2 motors) for a sporty feel, but they can switch back to AWD instantly.

          Overall, it would be fast car that is safer (better handling and usually has carbon fiber body), has less problems, as well as staying rust free.

          If enough people drive them, the air in cities, especially big cities will be alot cleaner.

      • Don says:

        Agree with your economics. On the other hand, the diesel electric hybrid option with a generator and electric drive bypassing the ICE drive line would appear to be the best of both worlds.

        • Steve says:

          There is simply not enough rare earth materials to create EVs for even a slim minority of the earth’s inhabitants. The push to EVs is a part of a depopulation and reset.

      • Auldyin says:

        @W
        I’m staying out of this but have you seen any blank sheet of paper entrants yet?
        To me, at the moment, they are just converting ICE structures to electric mechanicals.
        I think the transformative moment will come when the motor is in the tyre and all the uni-joints and shafts are done with once and for all and the weight plunges dramatically enough to allow a plastic suspension as part of a unitary moulding. It would have the power to weight of a housefly without the batteries but use in road pick-ups like scalectrix. If you go for it, go for it.
        Feel free to pursue my ideas, I’m too old to cash in.

        • Wolf Richter says:

          Auldyin,

          “…but have you seen any blank sheet of paper entrants yet?”

          Yes, all of them now. But there had been some failed efforts to convert ICE chassis to EVs, including Tesla’s Roadster (a Lotus). Ford is now trying to convert its best-selling commercial vans to electric, also going to be a failure.

          Tesla, Volkswagen, Porsche, Ford F-150 & Mustang Mach E, GM, etc., they’re all now using a “skateboard” platform: modular, option of one or more motors in front and one or more motors in the back, battery as part of the floorboards, nothing to do with ICE chassis. You can put different bodies on top. Huge cost savings.

          Here is one of Volkswagen’s platforms:

          https://wolfstreet.com/2020/11/13/volkswagen-throws-86-billion-at-evs-over-next-5-years-gm-ford-other-automakers-plow-mega-bucks-into-the-shift-to-evs-tesla-instigated-it/

          NB: Putting motors in the wheels has worked for rail vehicles, but for cars it doesn’t work because motors are heavy and create a lot of “unsprung mass” which is anathema on bumpy roads for all kinds of reasons. Automobile wheels must stay light to minimize the unsprung mass.

        • Auldyin says:

          I’m not arguing W.
          I said, what would be truly ‘transformative’ would be in-wheel motors, by which, I meant getting the unsprung mass right down to plastics and composites as opposed to heavy metals. I am sure it can be done by spinning copper and iron wires into composite materials which would be featherlight and could handle the torque spread over 4wheels. The wheel bearing would be the stress point but everything gets smaller as weight goes down. Steering could be done by twisting plastic suspension members. If I was 25, I would be working on it in my shed, but I like doing nothing and drinking whisky too much.
          I refuse to talk about batteries or the top end of the cable because that is taboo on MSM and that’s where the problems are. If all the battery plant money was put into in-road pick-up we would have a more efficient and more durable system but the vested interest is well underway and the pick ups would be public, can’t do in USA. Like the original Tesla/Edison days
          A little anecdote, I know you love trains, just kidding.
          When steam went to diesel USA had at least three major steam world players. Alco, Lima and Baldwin I think from memory, not good.
          GE came in as a newcomer with a sleek new concept Bo-Bo which everybody wanted. All the incumbents tried to adapt their established facilities to go Diesel but the change gradually killed them. If ICE incumbents don’t get massive Govt support to make the transition of their plants they’ll be wide open to disrupters, even Tesla and I bet the disruption comes from the super-engineers in East Asia. If I see my bet come in it will be a miracle and I don’t mean it won’t happen.
          That VW platform is a beautiful thing and I’m sure it will function perfectly but just saying innovation could go faster than that.

      • sailorgirl says:

        I wish the used EV credit was for converting ICE to hybrid vehicles. They do not even need to be electric hybrids just regenerative breaking systems to batteries under the seats. We both love our Ford Fusion Hybrids. Mine is not electric but plain regenerative breaking. Give incentive for conversion kits. Besides we need to be more conscious of exporting our carbon footprint to developing countries. The Used EV credit is just a 10 -20% downpayment on a new battery back. Conversion kits support your local mechanic.

        • Auldyin says:

          @sg
          Hybrids make total engineering and energy sense as a logical advance on basic ICE.
          Pure electric only makes engineering or energy sense if you stop burning fossil fuels and use atomic or renewables only. EV lost a fair fight against ICE long ago.
          By the way, if you stop using fossil fuels, industrial life as we know it ends, and we go back to feudalism only question is how long it takes and how many die in the fights.
          Just sayin’

    • Yort says:

      Engin-ear – Keep an eye out on the ultra/super capacitors. Lamborghini has a new design with super-capacitors inside the frame, and no batteries that work with a petrol engine in hybrid mode. EV bus designs use their massive brakes to charge super-capacitors and thus need fewer batteries. “Caps” are old school, but the designs are getting much more efficient and smaller and lighter…

      And TESLA, although I do think the stock price is hyper-silly, TESLA is working on some battery tech that is mechanical ingenuity in nature as much as chemical. I think Musk will be know in the history books for re-inventing the battery storage tech for many products, and forgotten on the actual auto part. I do have to laugh when I think about how much carbon Elon’s space tourism rockets put out though. Very much like the rich Davos elites flying individually in their private jets to discuss saving the planet from the little people. Although with the never-ending number of tiny “space mine” satellites Musk is putting in low orbit currently, I’m beginning to wonder if his plan is to eliminate future humans from leaving the planet period…sort of an extreme ten dimensional chess move green initiative…HA

      • otishertz says:

        Yeah, there ought to be an annual limit on carbon production by individuals. Go over the limit and you have to stay home until next year. That ought to fix all these polluting billionaires and their climate destroying yachts and jets.

        • Anthony A. says:

          I’m sure the regulations to limit carbon production would exempt billionaires and politicians.

      • SpencerG says:

        I didn’t realize until your post that Musk wasn’t using hydrogen to fuel his spaceships. For what it is worth, Bezos is.

      • Bobber says:

        We saw how early settlers in the West raped the landscape when they arrived. I assume space travel will be no different. With no laws or regulations in place, anything goes. What’s to stop Elon Musk and other future self-serving whimsical profiteers from accidentally altering our orbit or causing some other irrevocable damage in search of valuable minerals or some other profit-driver?

        Cutting down all the trees, uprooting civilizations, and killing all the buffalo is one thing. Messing around in space when you have no clue about its impact is another.

        The privatization of space travel is not a good idea.

    • otishertz says:

      People forget that electric vehicles were around long before Henry Ford made gas cars for the Beverly Hillbillies. Electric vehicles first arrived in the mid 1800’s, along with photography. This ain’t ground breaking technology. Check out the documentary called, “Who killed the electric car.”

    • rankinfile says:

      If you think the Republican Governors are bad now concerning masks and vaccine just wait until they try to ban ic vehicles.I myself own classic antique vehicles and know there will never be a ban.

      They will probably tax gasoline into the stratosphere much like they have with cigarettes.

      • Wolf Richter says:

        Consumers will choose. That’s how that works. Same with cashless payments. There is now a very large portion of US consumers, including my wife, that no longer carry cash. It’s all electronic payments. The government doesn’t have to forbid cash transactions. They’re going away on their own due to the choices made by consumers. But there are still some holdouts, like me, and we’re allowed to exist on the margin. It’s consumer choices that will make or break the EV industry.

        • MCH says:

          I think cash ought to continue to exist as an educational tool for children to the value of money.

          Otherwise, it’s easy to make people not understand the value of money (such as it is) and get a generation of people who can’t connect the expenses in their phones and on their cards to actual money.

        • MonkeyBusiness says:

          Cash means privacy. It’s not just an educational tool.

        • MCH says:

          @MB

          You get no argument from me on the privacy aspect. Although it would be silly to not take advantage of modern conveniences around cashless payments.

          But the educational component remains important.

        • 728huey says:

          I have no issue myself with cash per se, but since this pandemic began I’ve gone to an ATM to get cash about five times. I used to go to the ATM at least three times per week just prior,not to mention occasionally getting cash back when I went grocery shopping. Last week was the first time I stepped foot inside a supermarket in about a year, though I have gone to a local butcher shop a few times to get summer grilling meat and one time to get some Thanksgiving turkey breast.

    • Ron says:

      All ev really are glorified golf carts people are ignorant

      • SpencerG says:

        “All ev really are glorified golf carts”

        Which is OK. Take a look at the average car on the road…they are just boring, fuel efficient means of transportation. That is what most people choose to buy these days… with their own money! The people who buy a Honda Civic, KIA (anything), Chevy Malibu, or Toyota Corolla couldn’t care less if it is powered by gasoline, electricity, or squirrels on a treadmill.

      • Wolf Richter says:

        Ron,

        “All ev really are glorified golf carts people are ignorant”

        ROFL 🤣

      • RepubAnon says:

        My electric car has much better acceleration than most cars. Back in the pre-Covid days, I could drive to work for a week before needing to plug it in (at home).

        For those of us who remember the gas lines during the Arab Oil Embargo, it’s a good feeling.

  3. Red says:

    I don’t think the full rebate will make it,. Im long TSLA.

  4. Mike says:

    I live in Canada and the province of British Columbia gave the oil and gas sector a 24 billion tax payer subsidy.

    I think we are starting to witness the slow migration away from oil and gas subsidies to more innovative technologies that will actually use the money to develop new and innovative technologies.

    Ideally all subsidies should be stopped, but I rather see the money go to new sector companies if I had to choose the lesser of two evils

    • topcat says:

      Indeed – this is the key point. People simply forget, ignore or do not know that the auto industry is massively subsidised via the oil industry subsidies and health indisustry costs (polution) which amount to hundreds of billions each year.
      I await wolfs article on the unnecessary and dangerous subsidies that the ICE manufacturers receive. I can offer a title:
      Actual ICE Tax Credits = Braindead Economic Policy +Last Thing the Booming ICE Industry & ICE-Hungry Consumers Need

    • Paulo says:

      Batteries have along way to go. Excuse the pun. My buddy drives a plug-in hybrid. He starts off on hydro, with no heat to save his battery life. He has all kinds of strategies to do this, and most include wearing gloves and sitting on a rug. He uses the wipers sparingly. Then he switches over to gas and agonises over the fuel flow rate. This is for a 50 mile trip. I can see folks hitting a detour on their commute home, and monitoring their gauges. And how about the 1/2 hour charge time required? I fuel up our 12 year old Yaris in 2-3 minutes, it has a 500 km range, for less than $50.00. The payback to switch over to an EV would be several lifetimes.

      We’ll just drive less. I wouldn’t care if fuel was $10 per gallon. We’ll just drive less, and less, and less.

      As for Govt manufacturing subsidies, well that’s an easy one. None, Wolf said. But no one can complain when they build the new wheels in Viet Nam, or Thailand. My last MC was built in Thailand. Good bike. So, will there be import tariffs on new cars? How about a fuel tax and use the money for EV subsidies? Import tariffs are just another subsidy, but I guess that would be okay as the companies and stockholders would make the money on increased sales instead to the guys doing the work.

      One persons terrible subsidy is another persons lifeline. So let’s go whole hog and build them in some slave labour country. Use foreign steel and aluminum because it’s cheaper. Plastics from India and China using ME oil and NG. Oh yeah, no one will be able to afford a new car except for the investor class.

  5. TimTim says:

    With the optics of recent events not looking so good, the democrats are going to have to have something to virtue signal at the mid-terms next year.

    And isn’t there someone famous in the democrat party that has said a few times that he is a Union Man’…..

    • MCH says:

      Just wear a dress that says Tax The Rich to a $30k a pop gala for the rich. It will fix the optics problem.

      That and driving around in a Tesla while decrying the poor state of immigrants. In the later case, at least the argument can be made about how one is saving the environment.

  6. ivanislav says:

    So they want to punish automakers that pay wages high enough that workers don’t unionize. Nice!

    • RightNYer says:

      Given that the union dues go straight to the Democratic Party coffers, this isn’t a big surprise.

      • CJH says:

        Not to be too picky, but unions are politically right wing when it comes to the military industrial complex. The reason is simple. These outfits are union. Privatization and the suppression of labor rights have got us into these grotesque issues. Restoring union (labor) rights will be required.

        • RightNYer says:

          That might be the case, but it’s indisputable that nearly all campaign contributions from Big Union goes to Democrats.

        • 728huey says:

          Not necessarily. The Police unions are overwhelmingly tilted to the GOP. It’s the blue collar workers unions and teachers unions that are heavily Democratic.

  7. Yort says:

    Wolf stated – “If you buy a Ford EV, you’d get $12,500 in tax credits. If you then sell the EV to your nice, she’d get another $2,500. Taxpayers would be out $15,000.”

    Wolf- I think the sales tax when you retitle the used EV will be high enough that this won’t be a winning idea for family members, as long as the state has a minimum re-sale value per each vehicle regardless of actual sale price, which I believe most do now. My question is how many times can this $2,500 per a single EV occur? I do think it completely illogical, as the EV is already in private hands “saving the planet”, so it does no good to reduce additional carbon UNLESS the person who sold the used EV then is forced to buy a NEW EV (not a used EV) as a replacement…but what if they buy a jet…HA Now on an emotional level, the $2,500 attempts to present the “We care for the homeless”…as when the EV battery is toast and the car partially burns to the ground, then it would make a nice mini-home for the homeless that our Fed cares about so much…sarcasm

    I do think you are right that the manufacturers will simply raise the prices due to the $12,500, and absorb the EV stimmy…although this would not be the case if the govt and Fed would allow a recession to naturally occur for longer than three weeks, to where the auto companies had to depreciate their vehicles in order to move them to avoid bankruptcy.

    To be honest, bailing out GM, etc during the housing bust…along with cash for clunkers, did a lot of long term damage to the auto industry. I did some design work for GM a long time ago, and I got a close look inside the beast. They had/have major admin issues (low IQ over-ruled high IQ to the detriment/death of consumers), and I stopped doing work for them as I was afraid I would get caught up in a giant mega lawsuit (like the ignition key fiasco). I was really looking forward for GM to be broken up and the plants sold to Ford, etc…and new companies taking over the rest and hiring the engineering talent and line workers, and telling the huge amount of admin folks to get a productive job that involves more than telling others to work harder, longer for less and less. But just like the Fed, the govt ensures that there is no cleansing process on any level if the company is big enough to send legalized bribes via the lobby cartel…

    And the irony is we elect, not to be mean, but we do elect some of the most narcissistic, dingy humans to run our political system in a sort of talent/popularity contest better suited for entertainers (after TV was invented), and they are the ones who make trillion dollar gambles for our economy with the stroke of a pen. Imagine if we required a creativity and/or problem solving test to get a govt job. Then perhaps instead of forcing small business owners to sell by removing stepped up basis at death, they might be creative enough to simply remove all Wash Sales and limit any stock ownership to say 5-10 years. So then Bezos would have to sell after 5-10 years, pay capital gains, and then he could buy back it all instantly. Instead the proposal to “get the rich” is to hurt small biz by getting rid of fractional ownership discounts, remove like-kind exchange, elimination of step-up basis at death …etc So in order to get some money from a few billionaires, we are going to create a complex web of rule changes that will not be easy to navigate for small biz, yet the billionaires will find a way around it all like history has shown…sigh

    It all seems kind of surreal this point. The political waves are increasing in amplitude and frequency. We either have a Pres who want to subsidize light bulbs so we can have less innovation and create monopolies, or another one who wants to stick it where the sun doesn’t shine as a viral cure-all…LOL

  8. Todd Miller says:

    Without going into explicit detail, EV’s also consume large amounts of certain raw materials that are relied upon by other industries, forcing supply problems in those other industries.

  9. otishertz says:

    EV’s are wonderful. There are none of the moving parts like with internal combustion engines. I’m a big fan of small EV’s like E-bikes and cargo bikes. However, I can’t help but yell, “get your dang golf cart out of my way” when I meet an ugly tesla on the street.

    At least they are faster than a Prius but have that problematic spontaneous combustion issue. Bigger problem is the crappy drivers that inhabit those big screen mediamobiles with a false sense of security.

    I can’t see how tesla has not been shut down by the NTSB, Ralf Nader “unsafe at any speed” style, for all the reports of autopilot explosions.

    Lithium mining is not earth friendly. Plug “lithium mines” into your googlag info filter and click on images. Your tesla raped the earth quite literally, and likely burned a lot of fossil fuels at your power company.

    I agree tesla shook things up but Musk is a flim flam man and a charlatan.

    If the rocket scientists and space cowboys figure out a new source of power storage that is not toxic to the environment I’m all in on Ev’s. They make a lot of sense. But the power storage would have to be much more dense, and interchangeable like swapping out a propane tank at the gas station. (like you do for a forklift)

    A more dense energy storage unit might just be more combustible. Who knows?

    Give me a naturally aspirated V8, five english wrenches, and a sawed off shotgun and I’m good all through the zombie apocalypse. Heck, give me an old diesel Volvo or Mercedes and I can run on fryer fat. Hydrocarbons are more dense as a fuel source, and more portable.

    Really liking the new E-bikes tho.

    • Old School says:

      Does anyone not connect that subsidies have taken billions from savers (through financial repression) and made Musk second richest person in US?

    • rankinfile says:

      and hold the ethanol

    • Anthony A. says:

      “There are none of the moving parts like with internal combustion engines”

      Certainly have to agree about the IC engine parts, but Tesla and others have a lubricated gear case to step down electric motor speeds. The rest of the car is the same with axles, CV joints, suspension, braking systems, etc, etc.

      The main differences have to do with battery modules, electronics, inverters and electric motors. EV’s have their own degree of complexity and failure points.

  10. Wayne says:

    I’ve had a growing suspicion with the lockdowns that we have lost Saudi Arabia as an ally. Opec is not backing the Petro dollar. We all know this green business is bullcrap so the only reasonable conclusion is that without these measures we’re going to have another oil crisis.

  11. R2D2 says:

    Broadly speaking, EVs today are -50% simpler than ICE cars to build and service…

    When EVs need -50% less work, that means -50% less workers…

    The US govt is basically wasting a trillion to slash auto jobs by -50% thru 2040…

    Like a turkey voting for Xmas…

    • David Hall says:

      You may need more electric power infrastructure. Renewable energy is about 20% of electric power generation. Much of this is hydroelectric dams and wind power. The Colorado River seems to dry up during the summer before the winter rains. The Hoover Dam generated electricity. 3% of renewable energy is solar cells that wear out. You might need carbon emission electricity to charge your EV’s as you can not build windmills fast enough. EV’s use more silicon chips as Tesla is partially autonomous. You need more silicon chip fabs as it is.

      More tax credits seems like huge deficits and more debt. Another day older and deeper in govt. debt.

      • Michael Gorback says:

        Wind and solar aren’t going to cut it. Hydropower is running into trouble. Can’t use coal.

        Have you seen uranium prices lately? Guess what’s coming, even in Japan? Nuclear power. But this will be the new improved nuclear power right? Only one “emission” per plant – the first and last one.

        I’m not buying uranium stocks though. I’m buying physical. ;-)

        Whatever happened to the concept of thorium reactors?

        • MCH says:

          Glow in dark?

        • Rcohn says:

          There are 2 nuclear reactors currently under construction in the US and about 50 worldwide , mainly in China and India.
          It is estimated that nuclear will account for 11% of US electricity in 2050 compared to 19% now as more nuclear plants are decommissioned.
          If the drought continues in the West, hydro will be less important in many states in the West.

      • Wolf Richter says:

        David Hall,

        Electricity sales have been in a slump for over a decade. Utilities, stuck in this no-growth business, are eagerly awaiting the moment when they can increase their sales due to EV usage. But that’s not happening just yet:

        Here is the current mix of actual US electricity generation and sales (not capacity) by source:

        • Moosy says:

          Economics of EV’s or ICE is like buying an HP or Canon printer:

          It’s the ink , not that printer that brings the profit and both companies sell their printers at this huge discount that whenever I run out of ink and see the high prices for ink vs the price of the new printer (with ink), I wonder why they not just sell ink or ink with a free printer attached.

          With the EV’s vs ICE, it’s oil vs other energy sources who now suddenly thanks to EV’s can compete in the ‘ink’ supply for transportation.

          Natural Gas , thanks to shale much cheaper, can be used for both ICE and EV’s (cars running on nat gas are pretty common in europe). So for them, which type people use does not matter so much.

          Nuclear is just static in supply because energy generation is extremely cheap once operational but building more plants is extremely costly and regulated.

          Coal however seems to be the biggest victim of the natural gas but thanks to EV’s can now compete in transportation, as the figurative ink-supplier for those electric printers on wheels.

          Why else would coal price now be 5x higer than last year and 2x higher than it has ever been?

        • DawnsEarlyLight says:

          Nice charts Wolf. It seems NG has replaced coal as the primary source, with W/S making a gradual contribution. NG is a miracle energy source compared to coal! Do we have vast NG reserves as compared to coal?

        • Wolf Richter says:

          I always say that we will run out of clean air to breathe before we run out of fossil fuels to burn. Kinda tongue-in-cheek.

          As drilling technologies have advanced, more and more formations have become commercially viable to drill. Not sure where this process ends, but we’re not going to run out for a while.

        • David Hall says:

          Pennsylvania and Texas have natural gas. It burns cleaner than coal, but also emits CO2. Saudi Arabia has begun to develop large shale gas resources. UPS delivery trucks burn natural gas.

          There are 50 nuclear reactors under construction globally. It seems risky after the Three Mile Island, Chernobyl and Fukushima nuclear accidents. Vermont decommissioned a nuclear reactor and bought Canadian hydroelectricity.

  12. Boomer says:

    All in on the Union provision. Better my neighbor makes a livable wage than the Wall Street Oligarchs stuff their pockets with a larger piece of the pie, the globalist ultra elites with zero incentives to support our own great nation. I don’t want a car manufactured in Mexico or China. The sooner people figure out they’ve been screwed by Amazon, Walmart, Home Depot etc the better off we will be. The great awakening is coming like it did a hundred years ago.

    • Michael Gorback says:

      What’s wrong with a car built in Mexico? Do they spontaneously burst into flames like certain cars made in the US?

      What makes your neighbor’s livelihood more valuable than someone in Mexico?

      If the worker in Mexico can produce the car at lower cost, and that lower cost is passed along to you, then cutting out the Mexican increases your cost and you’re subsidizing your neighbor.

      Mexican auto workers can unionize BTW.

      Tesla, Nissan, Toyota, Honda and Volkswagen make cars in the US. They are not unionized. Mercedes plans to open a plant in Alabama.. I hope your neighbor doesn’t work at one of those plants.

      This is a vote-buying gift gift to the Big 3 US automakers and the UAW. And don’t think for a minute that there won’t be payback from Japan, Korea, Germany and Mexico.

      And you do realize who the real gift-giver is right? It’s you, the taxpayer.

      • CJH says:

        The destruction of labor rights was a necessary ingredient to creating our billionaire class that owns 80% of everything. Billionaire Nick Hanauer says the rich have what he calls an ‘auto-erotic fantasy’ (i.e., masturbation) where their competitors will have more expensive labor, which will provide the wage income to buy their less expensive products.

        • wkevinw says:

          “destruction of labor rights” was just globalization of the labor force.

          Prof Friedman famously noted that you can’t have a welfare state and a globalized labor force. Another way to say this is that costs of production are higher in the “developed world” – safety, environmental, health, etc. costs.

          Unions have power when there is scarce labor. Globalization got rid of the scarcity, so unions don’t have any power.

      • Wolf Richter says:

        Michael Gorback,

        “Do they spontaneously burst into flames like certain cars made in the US?”

        There are over 170,000 highway vehicle fires in the US every year. Very few of them related to EVs. And a couple of hundred fatalities due to ICE fires. They don’t make the news because that has been going on for 100 years. ICE vehicles are less fire-prone than they used to be, but they’re still fire-prone.

        Combine a hot internal combustion engine with a red-hot exhaust manifold, a high-pressure fuel system, 15 gallons of fuel, and electrical sparks, and you have an explosive mix with an effective ignition device. That has always been the case.

        But the nature and causes of EV fires are different than ICE fires. And fire departments cannot use water to extinguish them. And each single one of them sure makes the national and even global news.

        • Anthony A. says:

          Wolf, dead, burned bodies are more recognizable in gasoline related auto fires. No DNA analysis work needed as in a lithium battery roasted occupant(s).

          Re: Texas Tesla roast near my house a few months ago. Took a good while to figure out who was who in the roast.

          /s

        • KK says:

          Wolf,
          I’m all for EVs, but if you factor in the share of ICE vs. EV (EVs are at most 2% of new car sales) and the age of the vehicle (most EV’s are still new), I don’t know if you can say ICE cars are more fire-prone than EVs. I simply don’t think we have enough data for apples to apples comparison yet.

          Also, a bigger issue with EVs is EV fires can occur even when the vehicles are not in operation, just sitting in a garage.
          My understanding is ICE cars are very unlikely to catch fire if the engine is turned off, but that’s not the case with EVs.

          I want to own an EV if the total cost of ownership comes down enough, but the fire risk is more concerning for EVs because of that.

        • Wolf Richter says:

          KK,

          “I don’t know if you can say ICE cars are more fire-prone than EVs.”

          I never said that. I made no comparison between ICE and EVs. But I compared modern ICE with old ICE: “ICE vehicles are less fire-prone than they used to be, but they’re still fire-prone.”

          And I pointed out that ICE fires don’t get any attention, though there are 170,000 of them a year, killing a couple of hundred people a year. But when one EV bursts into flames, the whole world reads about them.

          I also pointed out that the fires and causes are different.

        • Raymond Rogers says:

          Wolf, I think you also have to factor in the nature of these fires as well. In ICE fires people often have a chance to get out.

          These rolling lithium bombs cause fast intense cookoffs. Youd be lucky if you could unbuckle. Maybe future models will cause this not to be the case?

          And these EVs are nowhere near planet friendly as many as the preening virtue signalers claim them to be.

        • Michael Gorback says:

          How many ICE vehicles spontaneously explode?

          Lithium batteries have the distinction of doing that – in cars, cell phones and laptops.

          Now if you look at collisions it might be different (both can catch fire or explode), but unlike EV, ICE explosions are extremely rare without a precipitating event.

          EV thermal instability can be caused by full charging or by using the battery beyond its recommended expiration date.

          EV vs ICE explosions in collisions are probably equal in incidence but obviously differ in mechanism.

          EV safety could be markedly improved if they would switch from lithium-cobalt to lithium-ferro-phosphate. The problem is that the lithium-cobalt batteries have far superior specific energy (energy per unit mass). Lithium-ferro-phosphate would require bigger batteries or more frequent charges. Otherwise they’re safer and cheaper.

          And iron mining is far less toxic to the environment than cobalt.

          The hope for EV is improved battery technology.

      • Taanstafl says:

        @michael gorback
        You do know that all german car companies are unionized? The Unions even have one third of the seats on the board respectivly. I wouldn’t hold my breath that Tesla Germany won’t join the crowd.

        • Michael Gorback says:

          In 5 years unionization won’t matter for foreign manufacturers. They will be locked out of the tax credit.

          Sounds a lot like protectionism to me.

        • Taanstafl says:

          @Michael Gorback
          500 bucks for a car that costs 50k+? That’s not even a rounding error.
          Btw, I’m absolutly pro protectionism against those who don’t fight fair. May it be concernig worker’s rights, the environment, taxes…

    • Taanstafl says:

      I agree. But it’s miniscule compared to the rest. So I assume it’s just a fig leave.

    • Bobber says:

      I’m not sure why many free market types are so against the concept of employee unions. A corporation is basically a union of owners (stockholders) with centralized bargaining power. So why not let workers have the same right to aggregate? In a free market, participants should be able to do what they want.

  13. Mark says:

    Over here in Australia we our government stopped handouts for our car industry and the industry left. Instead, about a decade ago, we started handouts for the construction industry. And so for the last decade or so we have had various government funded schemes of ‘free money’ as much as $50,000 to people buying a NEW home and for people buying a home for the first time.

    Do you think that has made houses more affordable?

    Nup, it has only become worse. Builders and the entire construction industry has been enriched though.

  14. Michael Gorback says:

    I don’t like any of this. What does unionized labor have to do with EV?

    What if you don’t have a big enough tax bill to eat up the tax credit?

    How does this help American workers? Dan Kildee (D-MI) said “In a decade, we want to see American workers making good wages building American electric vehicles.” In 2027 there will be no tax credit for cars made outside the US. Sounds a bit like a tariff.

    I can just hear the hard sell in the showroom. “Yeah, it’s $50,000 but after the IRS tax credit it’s only $42,500.” It’s like a realtor touting the mortgage interest deduction.

    I believe the bill limits the deduction to those with less than $400,000 AGI and vehicles costing less than $55,000. In August there was a non-binding agreement in the Senate to set it at $100,000/$40,000.

    I don’t like the government picking winners and losers. If EV can’t compete it won’t compete in a free market. The government shouldn’t be putting its thumb on the scale. You can’t be free-market and playing favorites at the same time, no matter how noble your claimed intention is.

    The stupidity never ends. For decades we’ve subsidized oil, then complained about gas guzzlers and enacted EPA mpg and emissions policies, whereas if we didn’t subsidize oil gas would be $5/gallon and people would buy more efficient ICE cars.

    The mortgage interest deduction didn’t make housing more affordable, it made a more expensive house affordable.

    Fortunately this still has to make it through the Senate, which

    • Michael Gorback says:

      Sorry about the last sentence. I snipped off the end and put it in a different part of the post.

    • John R says:

      The three largest subsidies for oil in the US are a) oil purchases for the strategic oil reserve, b) home heating oil subsidies to the poor, and c) road tax exemption for fuel purchased to operate farm equipment.

    • CJH says:

      There is no ‘free market’ for labor. There is a ton of ‘free money’ for the wealthy, however.

    • Russell says:

      The EU is instituting a carbon tax on all goods brought in that are not manufactured up to their “green standards.” That is just another tariff. None of this ends well. It’s a downward spiral.

      I agree with Wolf on this one. If an idea makes sense, the consumer will recognize the need and it will be self-sustaining. If not, come up with a better idea. Everyone doesn’t deserve a trophy or have the right to a subsidized business.

    • Wolf Richter says:

      Michael Gorback,

      I can answer this one:

      “What if you don’t have a big enough tax bill to eat up the tax credit?”

      It’s an amount of money that you get no matter what as long as you file a tax return. If zero taxes are due during the year, you will get a “refund” of the amount of the tax credit. There are a lot of tax credits like this out there.

      • Michael Gorback says:

        I haven’t seen any discussion of this in online storied. Is that in the Bill?

        • Wolf Richter says:

          That’s how the original/current $7,500 tax credit works, which is going to be revived and made permanent.

        • Michael Gorback says:

          How many times per year can you get these credits? If you get a credit in excess of your tax liability does it count as income?

          Make a living flipping cars for tax credits. Someone will figure it out.

          ;-)

  15. Danlxyz says:

    There is also a proposed bill for an E-bike tax credit. It is a refundable credit of 30% of the price of a new e-bike below $8,000 up to $1,500.
    I like e-bikes, especially when going up a hill, but this really is unnecessary. What’s next, electric roller skates?

    • Xavier Caveat says:

      My young nephew has an electric skateboard that does 25 mph and frankly scares me half to death, er the potential of his demise, that is.

    • Yaun says:

      And if e-bike tax credit, why not for regular bikes? It surely beats an e-bike in carbon neutrality, especially if you consider both the current energy mix and the cost of manufacturing the batteries. What about walking? 50% tax credit on sneakers. And we need to subsidize just sitting on our behinds doing nothing because that’s best for the environment. But fortunately, that, we already do.

      • Old School says:

        I want a $5000 credit for installing a clothes line.

      • Russell says:

        Yaun – You have to eat more to power the manual bike. What about the additional methane emissions? Someone will always find fault.

    • Wolf Richter says:

      Electric skateboards are hot in San Francisco. The government should just hand them out for free.

      • MCH says:

        Along with electric bikes.

        MCGA….

      • Xavier Caveat says:

        My nephew crashed last week and split his big toe open, which should have served notice how dangerous electric skateboards are, but markets must be served.

    • Old school says:

      Kymco has a nice looking EV scooter that will go 35 miles on removable battery with room to carry three spares under the seat.

      I have enjoyed my gas powered scooter and rode around in country for about 3 hours today exploring. Hard to believe that a 3 cubic inch (50cc) engine can move a 205 lb bike and two people around at 25 miles per hour.

  16. RightNYer says:

    “Automakers, like any company, charge the maximum price consumers are willing to pay. The competition is ICE vehicles. Most of the tax credit would simply cause automakers to raise EV prices to the maximum consumers would be willing to pay, given the tax credits. This is the automaker enrichment act.”

    Much like the canard that low interest rates “helps” homebuyers. No, it only helps sellers of houses.

  17. Winston says:

    Scotty Kilmer, an automobile repair guy on YouTube with 4.53M subscribers warns that even now, with relatively few EVs around in the US, owners are either not able to get replacement battery packs for them or have to pay insane prices. Granted, these are teething pains of a new industry and are also due to current supply chain issues, but as far as CO2 reduction is concerned, what is the source of the electrons charging them which travel a lossy sequence of steps to get to them?

    For CA, with its wonderful forestry management and Cro-Magnon power distribution system causing so much smoke that I can’t open my freaking windows multiple states away, plug another EV in there and some other part of CA will go up in smoke, significantly thanks to a scumbag who is probably going to avoid recall or be replaced by some other similar genius. In that case, Californians deserve what they get. But PLEASE don’t move to my state (but you have and you will).

    There Won’t Be Enough Batteries to Fulfill the Industry’s EV Promises
    A lot of electric cars have been promised. Some experts are warning there may not be enough batteries for them all. – JUL 21, 2021

    “Sholklapper, noting a shortage of trained battery engineers, said that automakers “don’t have enough test capacity, or enough data to look at to determine if they have a good battery pack or not. You need to really understand the data over time.” He added that a major hurdle is getting battery makers to certify their products for a 10- to 12-year service life in many different parts of the world, with different temperature ranges and climates.”

    “There are obviously other challenges for the battery industry besides manufacturing capacity, including securing vital supplies of raw material such as cobalt—mostly sourced from the troubled Democratic Republic of Congo. Lithium is at least more widely available, and a US domestic supply is emerging. General Motors recently invested in a program to extract sustainable lithium in California’s Salton Sea.”

    • 91B20 1stCav (AUS) says:

      Winston-majority of fires in the West occur on FEDERAL lands, Congress is ever loath to authorize adequate management funding. Toss in long-term record dry weather/heat/dry season lengths and you can’t but await multiple perfect (fire) storms. I’m sure your slice of heaven, wherever it is, isn’t exempt from its own climate issues, and i wish you well with your ‘management’ of them, but blaming the CA (or OR/WA/NV/ID/CO/UT/MT/AZ/NM/WY) governor for the fires makes as much sense as blaming the former presidential guy for not instituting better forest management on Federal lands (btw-check this summer’s woodland fires in ‘raked’ Finland..).

      ‘Cro-magnon power systems’ are a result of the investor-owned power providers neglecting maintenance (a la Congress above) over many, many years in favor of shareholder dividends coupled with a blindered and often-supine PUC. I can only imagine the screams of some investors here in years past if their PG&E dividends were reduced to adequately address preventive line work. (PG&E now seemingly hard at it in our area clearing line routes, something not seriously seen around here in almost twenty years-the issue forced now that any earlier available funds have been scraped off and absconded with by prior upper management…).

      rant over, and

      may we all find a better day.

  18. nick says:

    The same government that pushes the technology of the day is the same that hid the zero point Tesla (the real one, Nickola) free energy.
    No need for incentives when the ether has it all accessible for free.
    But it remains verboten by TPTB.

  19. trevor j taylor says:

    Wolf,

    For a numbers guy, I would expect to see something to support your claim that EV’s are doing great compared to ICE. From what I found, EVs are 2% of sales. To me, that is not great.

  20. CJH says:

    The income inequality gap between the top 10% and everyone else, is a separate problem not addressed by ‘competition.’ Competitive markets are fine, but so also is a fair distribution of incomes. Competitive markets do not cause wage growth. Economics is a social construct. Emphasis on the word ‘social.’

  21. SpencerG says:

    Wolf,

    Thanks for the deep look into this. My eyes glowed red at the mention of limiting these incentives to unionized manufacturers. It is almost like whoever wrote the bill wants it to fail. If these are the kinds of tidbits tucked into this bill then I am starting to understand why Manchin is calling for a pause.

    That said, I could see incentives if Congress wanted to speed up the adoption of EVs in a time when there was an unlimited supply of them. But we are currently butting up against EV manufacturing bottlenecks… so all that will happen (for now) is too many buyers will chase too few vehicles which means the price will go UP for buyers rather than down. WHICH DEFEATS THE WHOLE PURPOSE OF THE INCENTIVES.

    If Congress wanted to be serious for a moment all they would need to do is to raise the Gas Tax… that would penalize gas powered cars (over time) and promote EVs simultaneously.

    • Russell says:

      Raising the gas tax is a terrible idea. It needs to be abolished. It is one of the most regressive taxes and only hurts the poor guy driving an old pick-up to work because he can’t afford a new electric vehicle.

      This goes back to the main thought process. You can’t legislate bad ideas. Penalizing something that works is no different than subsidizing something that doesn’t regardless of how good it makes you feel.

  22. doug says:

    ‘If Congress wanted to be serious for a moment all they would need to do is to raise the Gas Tax… that would penalize gas powered cars (over time) and promote EVs simultaneously.’

    Spencer, that would make way too much sense, thus will not happen.
    ‘Surreal’ as Yort said above.
    I love the idea of an infrastructure bill, but only if it is not full of BS which it is now. We could really benefit from a targeted reasonable bill.

    • SpencerG says:

      Oh I know. The only way you might could get Congress to raise the Gas Tax is to point out that it would RAISE money for the government rather than cost the government money… AND would promote EVs.

      That said, don’t forget that this whole thing makes sense to the people who wrote it. Being seen as carrying water for Labor Unions is a good thing for them. Even if that part gets stripped out then they can say “Well, I tried!”

      And that goes for raising the Gas Tax as well. Congressmen like to be seen raising taxes on the “Rich”… not on the average schmo (who votes).

      These people know what they are doing. They just have a different value system than we do. Solid economic theory appeals to the readers of Wolfstreet… but getting re-elected is FAR more important to them.

      • Michael Gorback says:

        “Might could”. You a southern boy? In the elevator do you ask someone to “Mash 4, please?”.

        Not mocking, just reminiscing about my years in NC.

        • SpencerG says:

          LOL… no offense taken. I live on the Gulf Coast. I had a friend from Ohio tell me how he describes the area to his people back home and he said “I tell them that to get to the South I have to drive North.” It is all waterfront businesses, tourism, and military bases around here.

          I don’t have much of an accent (mostly due to decades in the military) but my language is certainly Southern. I don’t think I use “mash” though… that may be a NC thing.

        • Old School says:

          Yep, definitely a NC thing used by old timers. Also tote as in carry. There are some local dialects in the mountains and coastal areas that have their own words. One word is still used as a semi swear word but nobody knows what it’s original meaning was.

      • DawnsEarlyLight says:

        The intent is not to make the government money! It is about the money, but not for the average ‘schmo’!

  23. COWG says:

    The only type of EV I would consider would be one that had a base propulsion platform with interchangable body platforms…

    Drop the body you want on the propulsion platform, plug ‘er in , tighten a few bolts and now you have truck…

    Need the pax room, vice versa…

    You could even share body platforms with family and friends… or even rent one if didn’t want to own it…

    Yeah, I know, makes too much sense…

    • J7915 says:

      Air cooled VWs were pretty close to that concept.

      Also IIRC the first futuristic EVs were supposed to have replaceable battery packs : pull into a service bay and automated machinery pulled out “empty” battery…slid in a full one and you were back on the road, 5 to 10 minutes flat.

      The Beetle would be perfect, flat bellypan, bolt the emotor to the transaxle.
      Just admired a very well restored beetle here in Tulsa, very early 50s, can’t believe how small they were, but sure served me in the day. Learned to drive in one, then my father trade it in for a new one, 1st gear was sinchro also, a dream.

  24. qt says:

    “The total tax credits for new EVs made by unionized automakers would be $12,500. The total for Teslas, Toyotas, etc. would be $8,000.

    If you buy a Ford EV, you’d get $12,500 in tax credits. If you then sell the EV to your nice, she’d get another $2,500. Taxpayers would be out $15,000.”

    I think nice should be niece. :-)

  25. Ken Luskin says:

    EVs are still much more expensive to manufacture than ICE vehicles because of the battery costs.
    The damage to our health from breathing TOXIC AIR COST the Govt. about
    the what the Rebate costs
    = THIS IS GOOD POLICY!
    And this is the WORST ARTICLE YOU HAVE EVER WRITTEN!!!

    • Wolf Richter says:

      Ken Luskin,

      “EVs are still much more expensive to manufacture than ICE vehicles because…”

      OK, that’s already BS. Tesla Model 3 standard range costs $39,990 without tax credits. This is about $1,000 below the base price of a BMW 3 series, with which it competes directly, and below the average transaction price for new vehicles in August ($41,000). The Model 3 is a near-luxury vehicle, not an econo-box. I write about new vehicles all the time, so you should have seen this,

      You didn’t even read the article or else you would have seen that the tax credits are not needed because the EV industry is already booming. EVs are the only thing that is growing in the auto industry.

      Certainly, you haven’t read ALL my other articles, going back a decade, so you have NO IDEA what the worst article ever was.

      • Nikola I. says:

        Tesla model 3 is a horrendous tin can. I didn’t think cheaper junk than the Asian cars existed until I had the horror to look at how the Tesla is put together. A 3rd grader would design something more solid. They are designed for the junkyard.

        • Wolf Richter says:

          I wouldn’t buy one, for sure; but I have several friends/neighbors that own Teslas. They’re all happy with them. Two of them are on their second generation.

  26. wkevinw says:

    The environmental problems with the batteries are under-reported, I strongly suspect. Dealing with tires even today remains a big problem.

  27. qt says:

    I read report stating that ICE vehicles use about 200-300 chips while EV uses up to 3,000 chips per vehicle. How likely will this bill get pass? What will it do to the semiconductor industry and the current shortage crisis of these chips? I assume demands will go through the roof?

    • Wolf Richter says:

      I read that today’s ICE vehicles use several thousand chips. Not much difference. Today’s vehicles, whether ICE or EV, are computers on wheels.

  28. So the Ford Hermosillo plant is unionized, do you suppose I can get a tax credit worth nearly half the msrp on a Maverick? Hope so. Is this a great country or what? I mean both of them.

  29. Mark says:

    I agree with this article expect for the part about hurting taxpayers. Deficits have been huge and increasing for decades now. The excess spending won’t matter until the dollar loses reserve status. Or at some point the bond market forces an end to the madness.

    I’ve heard predictions of doom since the 80s, so don’t bother with any more.

    • Old School says:

      Deficits matter in deceptive ways as in to keep the ball rolling Fed is running a 5% financial repression on grandma and grandpa’s savings and median price of new home is approaching $400,000 and auto $41,000.

  30. PIETER says:

    So for Used EV that some poor sap buys used from some wealthy person…. whom should be liable for the battery once it starts going bad… the guy whom owns it or the manufacturer long term? All these batteries are going to be a problem long term because they are toxic.

    • DR DOOM says:

      The difference between life in death when the grid goes down as in a Hurricane can be in your ICE gas tank and other gas storage. This is just one tiny example of a limiting market variable for the EV. 100 gallons of dead Dino juice is a lot of watt/density Good luck with your battery.

  31. chris hubberstey says:

    Anyone notice the gazillions of tax breaks given to oil companies …. which have made ICE cars competitive?

    Price gas where it should be and EVs would win by a country mile, no subsidies required. Until then this is evening the playing field.

  32. TBP says:

    Most people’s ignorance on oil subsidies is astounding. If I open a restaurant and buy cooking equipment and tables and utensils, I’m able to deduct that as a cost of business. When an oil company drills a well, they deduct the labor and rig and casings and other costs of the well. The only difference is they deduct it all upfront rather than amortize over time. There is no secret magical deduction. There is an “oil depletion allowance” but that is relatively minor and only applies to the cash flow.
    Oil ain’t going away despite the doomsdayers. Not until an EV can be charged in the same amount of time it takes to fill a gas tank will that begin to happen.
    Additionally, there are several studies I’ve read stating the breakeven point before total emissions of the EV are less than an ICE is between 125k and 180k miles.

    • Wolf Richter says:

      TBP,

      “Additionally, there are several studies I’ve read stating the breakeven point before total emissions of the EV are less than an ICE is between 125k and 180k miles.”

      You’re citing data (or fiction?) from 10 years ago. The world has changed.

      Buy a $40,000 Tesla Model 3 (base price) and buy a $41,000 BMW 3 series (base price), competing models in same category of size and luxury, and you’re already in hole with your ICE BMW.

      In terms of operating costs, you’ll notice the difference as soon as you have to fill up the BMW.

      In terms of time spent: you have to take your BMW to the gas station and fill it up and get your hands dirty, while you plug the Tesla into your charger in your garage when you get home to top off the battery. Next time you need it, the battery is full. No dirty hands, not drive to the gas station, no credit card charge for gas… plus you can set the timer of your charger to operate in the middle of the night when electricity is cheapest.

      It’s really tiring to have to keep reading this old regurgitated nonsense about EVs.

      “Oil ain’t going away despite the doomsdayers.”

      Agreed. About half of it is used in the petrochemical industry, so that’s going to stick around. In terms of transportation fuel (for gasoline, diesel, jet fuel combined), oil has been on the down trend in developed economies, but a very slow down-trend having to do with fuel efficiencies mostly and less driving in some places.

      • TBP says:

        Wolf,
        I’m not comparing operating costs. Besides, comparing a Model 3 vs. a BMW 3 series is a joke. The quality isn’t comparable.

        The studies on total emissions are not 10 years old. I’ve seen recent studies within the past 2 years comparing total emissions generated by ICEs and EVs. It will take between 125K and 180k of driving to break even when all upstream and downstream emissions are considered. This is my main point. EVs just ain’t gonna move the needle. Modern ICE cars are so efficient they aren’t the problem with potential climate issues. If you wipe out all the ICE cars in the USA you’ll reduce total CO2 by about 2% worldwide. No doubt you’ve read about all the Chinese coal plants being built so they have enough energy to produce solar panels for us. This regression is going on in Europe as well as they are finding they can’t exist on renewables.
        Regarding fill up time – I’m referring to taking trips. I drive long distance with family and I sure don’t want to have to spend a minimum of 30 minutes waiting to refuel. This means everyone who does any traveling will have both an EV and an ICE until charging time is reduced to reasonable fill-up time.
        EVs are a construct the ESG people have glommed onto as a way of saying “I’m better than you and I’m saving the world.” It’s a canard that won’t make one bit of difference in the world. If one really wants to change the world, eat vegetarian. Don’t misunderstand, I’m not anti EV. Just don’t use my tax money to give to rich people to drive them. It’s ridiculous.

        • Wolf Richter says:

          TBP,

          OK, I see.

          A guy who buys an F-150 doesn’t give a crap about emissions. Why does an EV buyer suddenly have to give a crap about emissions? This whole emissions argument is hypocritical BS. People buy what they want to buy. That’s the American way.

          People want to buy EVs because they’re more convenient, cheaper to operate, easier to maintain, and because you don’t have to go to the goddamn gas station twice a month, but you can plug the thing in at home in your garage, and in the morning, it’s fully charged, and because EVs outperform ICE vehicles. That’s why people buy EVs.

          Pretty soon, you’ll see 600 hp EV pickup trucks hit the market. That’s why people buy EVs. Not emissions.

          And if you talk emissions, you need to talk about how electricity is generated, or else the entire discussion is beyond stupid. If you live in some place where 80% is generated from coal, that’s one thing. If you live in a place where much of the energy comes from nuclear, wind, solar, hydro, geothermal, topped off with natural gas, but without coal, such as in California, the emissions equation is very different. But I don’t give a crap. People believe what they want. And they buy what they want. And they want that 600 hp EV pickup.

          But yeah, there are emissions advantages with an EV in California (given the current power generation portfolio) over ICE, just so you know. And there are going to be more advantages as power generation adds more renewables. And yeah, that will come out of the hide of the oil industry. But the gas industry is going to sell some NG and is happy. But I don’t really give a crap, and that’s not why people buy EVs in California. None of the people I know who have EVs bought for that reason. They bought them because they love them. That’s the American way.

  33. TBP says:

    To add to the above note –
    There are 1.2 billion cars in the world and about 70 million are sold each year. About 4% are EVs.
    ICE vehicles use about 25% of the oil produced and emit about 7-9% of all CO2. The USA has about 20% of all cars so if we instantly eliminated all ICE vehicles it would reduce worldwide emissions by about 2%. In other words, the effect would be virtually unnoticeable. Anyone who thinks getting rid of the ICE car will solve any warming issue is ignorant or a liar. The world would be far better off if all of you imitated me and became vegetarian.
    In the proposed tax bill, they are attempting to eliminate the intangible drilling credits as I described above. All that will do is drive the price higher, meaning poor people will be more poor. That is a sure ticket for the Dems to not get re elected.
    EV subsidies are nothing but a transfer of wealth from people with average to poor incomes to the rich. I agree with Wolf wholeheartedly on this.

  34. Depth Charge says:

    Now we know why Nancy Pewwlosi bought all that Tesla stock. It’s called blatant corruption for self enrichment.

  35. LJ says:

    Relieving some misconceptions…
    The superiority of electric vehicles is not understood here. So many misconceptions because people haven’t owned them. Suffice it to say that a Tesla costs less than a Camry over a 5 year ownership. Electric cars have like 10% of the moving parts of ICE. There are so many small things, like lower center of gravity due to batteries. EVs harm the Saudis, Russia, Venezuela, and lots of other “oilagarchs”.

    If you don’t think global warming is a national security issue, then never mind. But if you do, incentivizing the switch is positive.

  36. polistra says:

    In terms of the numbers (not the reasons) this is a lot like 1947. Consumers have abundant money and cars are hard to get. Shortages of parts, shortages of labor.

    Henry Kaiser entered the fray in 1947 with huge federal subsidies. Kaiser was accustomed to fulfilling defense contracts, so he decided to run a car company the same way he had run his shipbuilding company. The subsidy gave him false confidence, led him to believe in his own omnipotence.

    He had Joe Frazer as a partner. Joe knew more about making and selling autos than anyone else, but Kaiser didn’t listen when Joe tried to acquaint him with automotive reality. Result: failure.

  37. Dom says:

    Seriously? Then STOP SUBSIDIZING big oil, McMansions, over-priced colleges, over-priced medical industry to name a few.

    Cannot think of a subsidy that has had such a huge impact regarding cost reduction as the ones for Evs, wind and solar. This effect on the economy and environment is already reaping big dividends!

    • Wolf Richter says:

      Dom,

      “Seriously? Then STOP SUBSIDIZING big oil, McMansions, over-priced colleges,…”

      This argument is a rhetorical fallacy called “whataboutism.” Google it up.

  38. Auldyin says:

    W, before you close this article I’ve just remembered something about in-wheel motors re-above comments.
    One of your countrymen, Steyer-Puch I think, made a beautiful ICE bicycle wheel where everything was in the wheel and the motor spinning was stopped by a strap to the frame. It all worked perfectly.
    When I was a kid I wanted to buy 4 of these wheels and put them on a cart but I was too poor and couldn’t do it. The idea was to have 4 throttles like a 747 and to go round corners by opening the outside pair and closing the inside pair depending on how fast you wanted to turn.
    Bringing that forward to EV, precise turning could be achieved by computer control of precise armature speed like a record player. If the right went forward and the left went backwards it could piroette on the spot at ever increasing speeds. Braking would be by regeneration then reverse polarity, no friction material or energy losses. Any number of wheels could be possible for trucks etc and wheels could be standardised mass produced on the scale of tyres. Same as tanks really without tracks.
    I only waited 40yrs to see hybrids but I think this one will be much quicker.
    Cheers

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