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You guys who argue this as always make a very good point. It is pretty incredible how much we spend on certain industries. Many of us open market people are not all that thrilled about subsidies, however one thing is that those oil company subsidies benefit everyone and not just a group of people looking to buy a novelty electric car. Those subsidies help to lower the price of a resource that is very high risk in acquiring and help to ultimately lower the cost of food at the grocery store, the cost of fuel so people can get to work, the cost of all goods, and so on. If you think that is bad in this country, it is crazy how much some countries subsidize their energy sector. This $7500 subsidy does not really benefit everyone. It just gives companies a chance to get their EV's onto the market. If the federal government wanted to subsidize the research or production of EV technology just like they subsidize the high risk activities of oil exploration(Shell recently spent $2B only to realize their find was a bust), then I would be more willing to find it acceptable. Subsidizing the cost so people can buy a luxury car? No.When the EV rebate cost to the Treasury is the same IN IT'S LIFE TIME (per manufacturer) as THREE WEEKS of ANNUAL oil company tax breaks, you don't get to complain about a $7500 tax credit that goes to the CONSUMER. When the tens of BILLIONS that go to a CORPORATION go away, maybe THEN you can complain.
So you are saying this free money from the government makes petroleum more affordable? The economy is better that way? Even if you really believe that, I'll bet you can't find an economist that agrees.
As has been pointed out more than once, luxury gas car buyers are subsidized MORE than luxury EV buyers. There is absolutely no to way to defend a position that EV subsidies should go away but petroleum subsidies should stay.
Hurray! Something positive to come out of this discussion.GM is actually closer to the cap right now than tesla is. more misleading nonsense.
The benefit to everyone is reduced dependency on oil for people transportation & cleaner air...that's worth $7500 to meSure, I'll take that argument.
Petrol subsidies by and large benefit everybody, because virtually everybody who is a working age adult is buying gasoline or diesel. By comparison the primary beneficiaries of EV subsidies to date have been people buying relatively expensive transportation who in all likelihood could purchase it even without the subsidy. In case of Model S this is 10X the case. I know one guy who owns a Model S and he makes $200K a year. Why should I be subsidizing his purchase when he could absolutely afford his luxury electric without my tax dollars?
It is honestly much easier to get behind the federal tax credit energy subsidies around things like putting in high efficiency insulation in your home or solar, as in many cases it results in fewer coal or NG burning power plants being built than a tax credit that helps an incredibly small number of people.
I'm glad that the subsidies have allowed Tesla to get a foothold in the market, but I will not cry when the subsidies are gone, even if it means I pay more for an EV because of it.
Sorry, branching off topic a little but...buried in the tax code.
even if it means I pay more for an EV because of it
Petrol subsidies by and large benefit everybody, because virtually everybody who is a working age adult is buying gasoline or diesel.
Why should I be subsidizing his purchase when he could absolutely afford his luxury electric without my tax dollars?
How about this:The tax break .... The U.S. government can't afford this cost when it's 19T and counting in debt.
Did the Model S/X 8 years get bumped to 10 years for Model 3? I missed a memo it seems.The warranty on the batteries is 10 years and from what I've read, while it depends on a number of factors, Tesla considers them to be defective if they lose more than 20% of their capacity in that time.
Since the forum won't let me do it directly, this is why I marked your post as "Dislike".novelty electric car.
You guys who argue this as always make a very good point. It is pretty incredible how much we spend on certain industries. Many of us open market people are not all that thrilled about subsidies, however one thing is that those oil company subsidies benefit everyone and not just a group of people looking to buy a novelty electric car. Those subsidies help to lower the price of a resource that is very high risk in acquiring and help to ultimately lower the cost of food at the grocery store, the cost of fuel so people can get to work, the cost of all goods, and so on. If you think that is bad in this country, it is crazy how much some countries subsidize their energy sector. This $7500 subsidy does not really benefit everyone. It just gives companies a chance to get their EV's onto the market. If the federal government wanted to subsidize the research or production of EV technology just like they subsidize the high risk activities of oil exploration(Shell recently spent $2B only to realize their find was a bust), then I would be more willing to find it acceptable. Subsidizing the cost so people can buy a luxury car? No.
Hurray! Something positive to come out of this discussion.
Can you provide some links or more specific data? Thanks!
Here is why the subsidy exists. New technologies are almost always more expensive than established technologies when they are introduced. This becomes a big barrier for adoption in an industry with a big cost to change and a big investment stake in the existing technology. Incentives encourage pioneers to open up this new market and get the ball rolling in the new direction.
Absolutely! This is how you effect change in something when you desire an outcome that varies from market equilibrium
There are a number of ways these incentives can be done. The old technology could be taxed more heavily, like they have done in some European countries, the companies expressing interest in developing the new technology could be given grants, or early adopters of the new technology could be given some kind of incentive.
The Model X has some novel features as does the Model S, but if they were ICEs, the base Model S 70 would probably be about on par with a fairly basic Ford Taurus. The 17 inch screen and what it offers is actually cheaper to make than all the buttons and switches on most ICE cars, the door handles are novel, but there isn't much else in the base car that isn't found on a mid-priced family ICE car.
What puts the Model S in the price range of luxury cars is the new technology which is expensive. The incentive gives a tax break to the rich to buy an expensive car so Tesla can do exactly what they are actually doing, taking the lessons learned from the expensive car, as well as the money made from that project to build a more affordable car that is affordable by everyone. Without the incentives, that whole arc would be far more difficult to achieve.
When you look at the demand inelasticity of early adopters who are just gung-ho about getting into something that so aligns with their personal, political, or enthusiastic beliefs, generally the lack of such an incentive will not keep them from purchasing it. This is especially true at those price points. It is more likely to be a factor at the lower price ranges such as the Volt, Bolt, and other similarly priced vehicles. This is how Tesla mostly chose to use their 200k cap. Tesla buyers still get a tax break in most states where they are not paying a fuel tax since only a few states requires EV owners to pay extra during registration and renewal.
As for free markets, they are mostly a myth. Throughout history they have been rare, and when they did exist, things often went pear shaped. Americans like to tell ourselves that we're this independent people who get things done without any outside help, but the biggest growth in American history happened largely because of government handouts. The biggest was the westward expansion during the building of the railroads and just before that time. The government gave away land to anyone who could prove they could make use of it and the government gave tons and tons of land to the railroads, not just the right of ways for the railroads themselves, but entire sections of land surrounding the tracks the railroads sold and the backers walked away some of the richest people in the country. The country is dotted with the legacies left behind by these people.
Developing any kind of industry or infrastructure with high capital costs is very risky and governments are always in the middle of those projects to some degree because governments are the only entities big enough to absorb the risk. Tesla has had far less government help than most new industrial endeavors. The fledgling car industry in the early 20th century got help too, in that case in the form of new roads all over the country that were better suited for the new horseless carriages. The American road system was a massive investment by governments in the country's infrastructure. Far far larger than the paltry investment in EVs today.
As Chad and others have noted, this is a narrow view of the intent of the EV subsidies. Some would argue that changing a car buyer's decision from a gasoline/diesel vehicle to an electric vehicle -- assuming it meets the buyer's needs -- benefits the human population of the planet as a whole.subsidies ... However it should be used in a manner that benefits more than just the buyer.