Georgia an electric car giant - But will it last?

Cover story from this week's Atlanta Business Chronicle... Georgia an electric car giant - But will it last??:
http://www.bizjournals.com/atlanta/...a-an-electric-car-giant-but-will-it-last.html

Proposal in the article offers reducing the tax credit to $3000 starting July 1, 2015 and reducing it again to $1500 on January 1, 2018, before eliminating it permanently on Jan. 1, 2020. Also note this proposal would extend the tax credit to plug in hybrids (Prius, Volt, etc.).

sonnylax said:

Cover story from this week's Atlanta Business Chronicle... Georgia an electric car giant - But will it last??:
http://www.bizjournals.com/atlanta/...a-an-electric-car-giant-but-will-it-last.html

Proposal in the article offers reducing the tax credit to $3000 starting July 1, 2015 and reducing it again to $1500 on January 1, 2018, before eliminating it permanently on Jan. 1, 2020. Also note this proposal would extend the tax credit to plug in hybrids (Prius, Volt, etc.).

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Good, subsidies should phase out over time, and IMO Georgia's is over generous now. I wish we hadn't extended the HOV lane stickers until Jan. 1, 2019 here in California. They were originally due to sunset on Jan. 1st this year, and I would have preferred that they be extended to no later than 1/1/2017. Oh, and that they cap the car price and/or the income that qualifies for the state rebate and federal credit - neither the state or the federal government should be helping private individuals buy a Model S now, and they shouldn't at any time help pay for an i8, 918 or similar rich man's exoticar/phallic-replacement-mobile.

I think the $5k credit is a good amount. But if they want to reduce the amount the state is paying, they should only offer it for purchases and not leases. Or if it's a lease, make the 20% cap on the amount of the lease payment instead of the total value of the car. The credit makes a lease end up being $100-200/mo, and then the gas savings pays for the cost of the lease. And there's no risk for depreciation, etc. A credit for people who purchase makes a lot of sense.

I still find it surprising that the Georgia legislature which is pretty conservative and usually fairly frugal approved a no limits $5,000 rebate.
TN which is building the LEAF was much more frugal limiting it to $2,500,000 of $2,500 cash at the time of the transaction to those in the EVProject. Uptake of the 2011 LEAF was so slow that only about 650 of the 1000 cash payments were used

GRA said:

Good, subsidies should phase out over time, and IMO Georgia's is over generous now.

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I'm with you there. $5K doesn't seem sustainable. Actually, what I really think would be best would be to eliminate all subsidies for EVs as well as on oil production, institute a carbon tax, and cut taxes elsewhere so that the net effect is "revenue neutral". Better yet, cut overall taxes while cutting government spending.

GRA said:

I wish we hadn't extended the HOV lane stickers until Jan. 1, 2019 here in California. They were originally due to sunset on Jan. 1st this year, and I would have preferred that they be extended to no later than 1/1/2017.

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To limit over-use of HOV lanes, why not start by rescinding access for plug-in hybrids? Many of them are likely burning gas while in the HOV lane.

GRA said:

Oh, and that they cap the car price and/or the income that qualifies for the state rebate and federal credit - neither the state or the federal government should be helping private individuals buy a Model S now, and they shouldn't at any time help pay for an i8, 918 or similar rich man's exoticar/phallic-replacement-mobile.

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Why not? Rich people are influenced by incentives. The goal here isn't wealth redistribution, it's nudging people in favor of adopting new, green technology that starts out expensive. Besides, a great many people buying the Model S aren't all that "rich"; like other luxury car buyers, many are up to their eyeballs in debt with little in savings. All flash and no cash, as they say.

abasile said:

GRA said:

Good, subsidies should phase out over time, and IMO Georgia's is over generous now.

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I'm with you there. $5K doesn't seem sustainable. Actually, what I really think would be best would be to eliminate all subsidies for EVs as well as on oil production, institute a carbon tax, and cut taxes elsewhere so that the net effect is "revenue neutral". Better yet, cut overall taxes while cutting government spending.

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Oh, if only I were a starship captain: "Make it so, No. 1."

abasile said:

GRA said:

I wish we hadn't extended the HOV lane stickers until Jan. 1, 2019 here in California. They were originally due to sunset on Jan. 1st this year, and I would have preferred that they be extended to no later than 1/1/2017.

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To limit over-use of HOV lanes, why not start by rescinding access for plug-in hybrids? Many of them are likely burning gas while in the HOV lane.

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I've never been a fan of any HOV lane use by SOVs, as the point of them is to reduce congestion by increasing the average # of people per vehicle, i.e. changing people's behavior rather than their vehicle fuel. I recognize that perks were needed to get people to buy/lease these cars initially, but am not in favor of such perks for a second longer than they are necessary.

abasile said:

GRA said:

Oh, and that they cap the car price and/or the income that qualifies for the state rebate and federal credit - neither the state or the federal government should be helping private individuals buy a Model S now, and they shouldn't at any time help pay for an i8, 918 or similar rich man's exoticar/phallic-replacement-mobile.

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Why not? Rich people are influenced by incentives. The goal here isn't wealth redistribution, it's nudging people in favor of adopting new, green technology that starts out expensive. Besides, a great many people buying the Model S aren't all that "rich"; like other luxury car buyers, many are up to their eyeballs in debt with little in savings. All flash and no cash, as they say.

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Because the point is to drive the cost of these cars down to where the average, middle income consumer can afford them and consider them practical, not to reward people who can easily afford them with expensive toys. If people are crazy enough to load themselves up with debt by buying things they can't afford and don't need, why should we help them do so? (Don't get me started on yachts and aircraft!) If you want to spend your money on bling, go for it, but don't be spending mine on it as well.

GRA said:

Because the point is to drive the cost of these cars down to where the average, middle income consumer can afford them and consider them practical, not to reward people who can easily afford them with expensive toys. If people are crazy enough to load themselves up with debt by buying things they can't afford and don't need, why should we help them do so? (Don't get me started on yachts and aircraft!) If you want to spend your money on bling, go for it, but don't be spending mine on it as well.

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The counter-argument would be that, if someone is already inclined to over-spend on a vehicle, we'd rather it be a Tesla Model S than, say, a BMW 7 series. More Model S sales translate to larger volume for Tesla Motors and an enhanced ability to execute plans to mass produce more affordable vehicles. And if nothing else, Tesla is having a positive effect on the whole EV market (even Carlos Ghosn agrees with that).

Granted, a $7500 (or $12,500) subsidy won't make as big a difference if the vehicle price is higher. But it's still a pretty significant discount, and thus motivating factor, for the buyer.

That said, I fully agree that subsidies should not exist one second longer than necessary. Of course, that also means that oil companies should be paying full market rates for the right to operate on public land.

TimLee said:

I still find it surprising that the Georgia legislature which is pretty conservative and usually fairly frugal approved a no limits $5,000 rebate.
TN which is building the LEAF was much more frugal limiting it to $2,500,000 of $2,500 cash at the time of the transaction to those in the EVProject. Uptake of the 2011 LEAF was so slow that only about 650 of the 1000 cash payments were used

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I was shocked that GA has such a generous credit too. Interestingly, it was passed in the 90's and has remained ever since. It only started to be really used the past couple years.

Modified plan still looks good.

I don't agree that it would be for purchases and not leases. Afterall Nissan is taking the risk in leases - not the government.

The 4500 in 2014 tells us, Nissan sold 25k cars outside GA. Definitely the sales would go down in GA in 2015 - but probably not get completely eliminated. So, Nissan can probably still think about selling 2.5k or so cars in GA in 2015.

A couple of more recent articles just came out this week...

http://www.ajc.com/news/news/state-regional-govt-politics/lawmaker-seeks-quick-end-to-electric-car-tax-credi/njx4L/" onclick="window.open(this.href);return false;

https://transportevolved.com/2015/01/28/following-failed-attempt-last-year-electric-car-incentives-back-cutting-block-georgia/" onclick="window.open(this.href);return false;

My lease expires in the 4th quarter this year and I'm in a holding pattern (along with many other GA lessees) awaiting the 2015 legislative outcome to figure out next steps...

Adam

Lots of focus on Georgia in this 2/26/15 article....

Resale Prices Tumble on Electric Cars
http://www.wsj.com/articles/resale-prices-tumble-on-electric-cars-1424977378

This has driven down resale values of plug-in electrics including the Leaf and General Motors Co. ’s Chevrolet Volt, representing another hurdle for auto makers trying to boost sales of alternative-fuel vehicles.

Other electric cars, including plug-in versions of Ford Motor Co. ’s Focus and Toyota Motor Corp. ’s Prius, are depreciating as fast as the Leaf with the average trade-in value in 2014 falling between 22% and 35%, depending on model, according to the National Automobile Dealers Association’s Used Car Guide. The depreciation rate on plug-in electric cars is nearly twice that of a comparable gasoline-engine car, NADA Used Car Guide found.

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Mr. Hoban, the Atlanta dealer, returns a majority of the Leafs he is taking in as leases expire to the manufacture, even though Nissan offers current lessees $4,000 in incentives to buy the used model they are driving.

“We’re turning the vast majority of them in” to Nissan, he said. “It would probably be smart if Nissan would develop a secondary lease.”

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Comparison of the GA House Bills that modify or eliminate the EV Tax Credit.

http://www.gpb.org/news/2015/03/02/why-georgia-may-end-its-electric-car-tax-credit" onclick="window.open(this.href);return false;

And it's going, going, (soon to be) gone: http://insideevs.com/georgia-kill-5000-electric-car-credit-will-impose-200-annual-road-use-fee-evs/" onclick="window.open(this.href);return false;

I'm telling my family and friends that if they thinking about an EV lease or purchase, do it by June 30th!
I imagine that Tesla sales will continue, but that Leaf sales here will fall pretty drastically.

tractioninc said:

I'm telling my family and friends that if they thinking about an EV lease or purchase, do it by June 30th!
I imagine that Tesla sales will continue, but that Leaf sales here will fall pretty drastically.

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I think Georgia can expect a huge frenzy of BEV sales/leases for the next three months, followed by the sound of crickets chirping.

Here we go, via GCR:

Insult To Injury? GA Kills Electric-Car Incentive, Adds Last-Minute Luxury-Car Tax Break

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http://www.greencarreports.com/news/1097641_insult-to-injury-ga-kills-electric-car-incentive-adds-last-minute-luxury-car-tax-break" onclick="window.open(this.href);return false;

The second clause refers to a tax break for Daimler-Benz employees who buy M-Bs (D-B is relocating their corporate HQ to Georgia). Meanwhile, from ievs.com:

Washington State Proposes $35,000 Cap On Sales Tax Exemption For Electric Cars

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http://insideevs.com/washington-state-proposes-35000-cap-on-sales-tax-exemption-for-electric-cars/" onclick="window.open(this.href);return false;

The government-backed leases/purchases of luxury BEV toys are starting to disappear. IMO it's time.

tractioninc said:

I'm telling my family and friends that if they thinking about an EV lease or purchase, do it by June 30th!

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Took my own advice and signed the paperwork on a new EV this evening.

I kept hearing that they were going to kill the credit. However, after reading the article and seeing that they are just going to lower it, and eventually phase it out, I'm ok with that. We didn't even have any state incentives here in Texas for a while. We finally got $2,500 last year. But this hasn't stopped people from buying the cars. If anything, our culture of big trucks and SUVs has been the most limiting factor of sales around here.

adric22 said:

I kept hearing that they were going to kill the credit. However, after reading the article and seeing that they are just going to lower it, and eventually phase it out, I'm ok with that. We didn't even have any state incentives here in Texas for a while. We finally got $2,500 last year. But this hasn't stopped people from buying the cars. If anything, our culture of big trucks and SUVs has been the most limiting factor of sales around here.

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That was an alternate bill, the one that passed eliminated the credit and added a $200 yearly fee for EVs. I haven't seen any notice yet that the governor signed it, but it passed both houses of the Georgia legislature.

GRA said:

I haven't seen any notice yet that the governor signed it, but it passed both houses of the Georgia legislature.

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Turncoat Democrat Nathan Deal will sign it.