[H]ouseholds earning over $100,000 annually, who certainly don’t need or deserve government assistance, receive approximately 80% of federal EV subsidies.

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Electric vehicles (EVs) offer a promising and fascinating technological innovation, even for the most cantankerous traditionalists. 

That doesn’t mean, however, that federal tax dollars should be subsidizing them. 

Especially when those subsidies constitute a handout to wealthier Americans who can already afford them, most of them go to California residents and their environmental benefit is nonexistent. 

Unfortunately, existing federal law does exactly that.  Worse, some in Congress actually seek to expand what was originally intended as a temporary, limited tax credit to allow the electric vehicle industry to germinate into a permanent, limitless subsidy. 

A better idea would be to end this indefensible, costly, distorting subsidy.  At the very least, however, we mustn’t allow crony capitalists to exacerbate the problem. 

Back in 2008, the Pelosi-Schumer Congress passed legislation steering $7,500 tax credits to purchasers of EVs, which was unwisely signed by President George W. Bush.  At the time, Senator Orin Hatch (R – Utah) stressed the temporary and limited nature of the subsidy: 

I want to emphasize that, like the tax credits available under current law for hybrid electric vehicles, the tax incentives in the Freedom Act are temporary.  They are needed in order to help get these products over the initial stage of production, when they are quite a bit more expensive than older technology vehicles, to the mass production stage, where economies of scale will drive costs down, and the credits will no longer be necessary. 

That was over a decade ago, yet we somehow remain in that “initial stage.” 

Barack Obama subsequently expanded that credit to cover the first 200,000 EVs from any given manufacturer, which by 2017 had cost American taxpayers over $2 billion. 

But that’s just the beginning of the program’s glaring defects. 

First, households earning over $100,000 annually, who certainly don’t need or deserve government assistance, receive approximately 80% of federal EV subsidies.  The program therefore effectively constitutes a regressive tax upon middle-class and lower-class Americans. 

That offers an amusing cognitive dissonance among neo-socialists.  On the one hand, they incessantly feign distress over wealth inequality, and leverage that false concern to advocate economically destructive tax increases.  Yet on the other hand, they insist upon market-distorting taxpayer subsidies toward the wealthy such as this. 

Moreover, Californians receive a disproportionate percentage of those subsidies for the wealthy.  Approximately 50% of new EV sales occurred in California, even though that state represents just 12% of the American auto sales market.  Accordingly, 49 states and Washington, D.C. subsidize expensive automobiles for wealthy Californians. 

Another defect:  EVs actually offer no environmental benefit versus today’s internal-combustion engines.  That’s because EVs draw their power from our electric grid, which generates power from energy sources that produce more pollution than modern gas-powered engines.  Even Germany’s IFO Institute determined that EVs failed to outperform internal-combustion automobiles in such measures as carbon dioxide emitted. 

And here’s the kicker:  federal subsidies for EVs are widely unpopular among the American electorate.  According to an American Energy Alliance survey, 72% of voters distrust the federal government to determine which types of vehicles should and shouldn’t receive taxpayer subsidies, and fully 67% agree that the broader public shouldn’t be compelled to subsidize EV purchases. 

Despite all of those defects and public unpopularity, some in Congress nevertheless seek to expand federal EV subsidies.  More specifically, they seek to eliminate the 200,000-vehicle cap on subsidy eligibility, which the Institute for Energy Research calculates will cost $95 billion between 2020 and 2035 alone, or $610 per U.S. household. 

There’s simply no rational defense for expanding what is already an indefensible federal boondoggle into what could amount to a new unlimited liability for American taxpayers.  

Whatever one’s opinion on EVs as a personal matter, the federal government shouldn’t be wasting billions of taxpayer dollars to disproportionately benefit wealthier households, particularly in California, or picking winners and losers in a functioning U.S. auto marketplace.  A lack of consumer demand for EVs doesn’t justify manufacturers seeking even more subsidies from Congress.  It’s time to end this wasteful, crony capitalist handout to the rich, not expand it even further.