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Power Government United States Technology

Trump Administration Wants To End Subsidies For Electric Cars, Renewables (reuters.com) 481

Posted by BeauHD from the line-in-the-sand dept.
White House economic adviser Larry Kudlow said on Monday that the United States wants to end subsidies for electric cars and other items including renewable energy sources. "Asked about actions planned after General Motors announced U.S. plant closings and layoffs last week, Kudlow said he expected subsidies for buying electric cars will end in 2020 or 2021," reports Reuters. "Kudlow said the Trump administration will end other subsidies, including on 'renewables.'"
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Trump Administration Wants To End Subsidies For Electric Cars, Renewables More

Trump Administration Wants To End Subsidies For Electric Cars, Renewables

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  • Good (Score:2, Insightful)

    by Anonymous Coward

    We shouldn't be subsidizing luxury vehicles for the wealthy.

    Put the money into public transport and renewable energy instead.

    • Re:Good (Score:5, Insightful)

      by hawguy ( 1600213 ) on Monday December 03, 2018 @08:08PM (#57744138)

      We shouldn't be subsidizing luxury vehicles for the wealthy.

      Put the money into public transport and renewable energy instead.

      EV's are not luxury vehicles for the wealthy, and haven't been for some time.

      For example, the Nissan Leaf starts at $30K -- in a country where the average price for a new car is $33K.And no one that's driven a Leaf could confuse it with a Luxury car. Some expensive EV's do receive subsidies... which is good since it means that affluent early adopters pay a premium for new technology and then as the technology is refined, it trickles down into more affordable vehicles.

      EV's are part of a renewable energy plan - not only are they more energy efficient and cleaner than gasoline powered cars, they automatically take advantage of the shift to renewable power in the energy grid.

      • Re: (Score:3)

        by crow ( 16139 )

        And I was able to get a used Leaf for $6300. It's range isn't great, but it meets my needs. If the original purchaser didn't get a tax credit, that used car likely wouldn't have been available for me.

      • Lol.. Tiny vehicle that barely holds 4 passengers and a grocery bag starts at $30K.. and it isn't a luxury.

        • Re: (Score:2)

          by hawguy ( 1600213 )

          Lol.. Tiny vehicle that barely holds 4 passengers and a grocery bag starts at $30K.. and it isn't a luxury.

          The Leaf has 24 ft^3 of cargo space (with the seats up), compared to a 29 ft^3 for a $45K BMW X3. You can buy a lot of grocery bags for that extra $15K in your pocket and you don't need to go to gas stations any more.

      • "Nissan Leaf starts at $30K -- in a country where the average price for a new car is $33K" So what do they need subsidies for?

      • EV's are not luxury vehicles for the wealthy, and haven't been for some time.

        For example, the Nissan Leaf starts at $30K -- in a country where the average price for a new car is $33K.

        That's the average - and it's pulled up by luxury sedans and big pickups. The Leaf is a compact, and comparing like-to-like the average cost of a new compact in the US is in the $20k range. Also, the last time I looked, the average income recommended to be able to afford a car in the $30-35k range (Leaf to low end Model S) pu

      • EV's are not luxury vehicles for the wealthy, and haven't been for some time.

        For example, the Nissan Leaf starts at $30K -- in a country where the average price for a new car is $33K.And no one that's driven a Leaf could confuse it with a Luxury car.

        The posting says the subsidies would end in 2020 or 2021. Given the cap on sales already in place the subsidy on the Leaf will probably end before that anyway. I would suggest though that tax credits should only apply to cars manufactured in America. The Leaf is made in America, Japan, and the UK.

      • Re:Good (Score:5, Informative)

        by Solandri ( 704621 ) on Monday December 03, 2018 @09:51PM (#57744756)
        The Federal $7500 EV subsidy was structured as a tax credit. To take full advantage of the credit, you had to owe at least $7500 on your Federal taxes the year you bought/leased the EV. If you look at the 2016 IRS tax stats [irs.gov], you had to make about $80k/yr (column O*1000 / column N) to receive the full credit, which would put you in the top third of the U.S. by income. Someone making the U.S. median income of $59k would only receive about $4500. Or put another way, the subsidy makes that Leaf cost $3k less for the guy making $80k+ than it does for someone making $59k.

        If you don't like EVs, you should be for repealing the subsidy because you don't think EVs should be subsidized.

        If you like EVs, you should be for repealing the subsidy because it unfairly benefits wealthy people.

        • The Federal $7500 EV subsidy was structured as a tax credit. To take full advantage of the credit, you had to owe at least $7500 on your Federal taxes the year you bought/leased the EV.

          That's not a tax credit, that's a tax rebate. A tax credit is given to you when you file your taxes whether you owe or not.

          If you like EVs, you should be for repealing the subsidy because it unfairly benefits wealthy people.

          In a simpler world, that might be true. In the real world, issues like this are complex. The more EVs sold to wealthy people, the more EVs can be produced for less-wealthy people because of economies of scale.

      • Re:Good (Score:5, Insightful)

        by mark-t ( 151149 ) <markt AT nerdflat DOT com> on Tuesday December 04, 2018 @12:43AM (#57745488) Journal
        The Nissan Leaf may be $30K while the average price for a new car is $33K, but that's only because the average new car is not a compact, which is the classification that the Leaf falls in. A brand new compact vehicle can be purchased for $20K or sometimes even less.

        • The Nissan Leaf may be $30K while the average price for a new car is $33K, but that's only because the average new car is not a compact, which is the classification that the Leaf falls in. A brand new compact vehicle can be purchased for $20K or sometimes even less.

          True, but total cost of ownership of the Leaf will often be lower. You trade a higher payment for lower fuel and maintenance costs. So it's not a car for the wealthy, it's a car for the prudent whose driving patterns fit certain (extremely common) profiles.

          I did this exact analysis quite thoroughly several years ago before I bought my Leaf. In practice I find that I actually underestimated the operational cost difference... and the purchase price difference turned out to go the other direction, thanks to

    • Re:Good (Score:5, Insightful)

      by crow ( 16139 ) on Monday December 03, 2018 @08:14PM (#57744182) Homepage Journal

      The EV tax credit and similar state programs encourages more people to buy EVs, which in turn encourages car manufacturers to make and sell them. Tesla has used this to get them to a high-volume $35K car (which they'll hit while the tax credit is phasing out). Nissan has used it to make a more affordable shorter-range EV, and they've increased the range to be more practical as they approach the phase-out of the federal tax credit. I think both companies have used the credit to expand the EV market and drive the manufacturing costs down. (And GM, too.)

      The issue I have is that the companies that used the credit constructively are now facing the phase-out while those that waited to jump in after they did all the work will get to take advantage of it over the next few years. The credit should phase out for everyone together, not on a per-company basis.

    • Re:Good (Score:4, Insightful)

      by rmdingler ( 1955220 ) on Monday December 03, 2018 @08:18PM (#57744212) Journal

      We shouldn't be subsidizing luxury vehicles for the wealthy.

      Put the money into public transport and renewable energy instead.

      Electric vehicles and the associated technology necessary for their cost-effective development for distribution to the masses depends upon subsidizing its early research and advancement.

      Sure, the rich are the only customers early on, but as the R & D is paid for, before you even know it, microwaves and VCRs are available to the common folk.

    • Fair enough. He's not going to do that either.

    • Re:Good (Score:5, Insightful)

      by fermion ( 181285 ) on Monday December 03, 2018 @09:55PM (#57744768) Homepage Journal
      It is about jobs.

      In the 1980's, Reagan used this argument to completely end renewable energy research and development. In the process he handed all the jobs, profits, and other benefits to Asia and Germany.

      Yes, right now the electric cars are a luxury item. Back them renewable energy was a luxury few of us could afford. You had to have disposable income to buy your electricity from Green Mountain energy. Unfortunately all those wind turbines are controlled by the Germans and Danes.

      Now, I personally find no value in manufacturing in the US. I don't think that our work force, unwilling to be educated beyond the 8th grade, can really manufacture high tech quality products. But if we are going to continue to pursue a manufacturing economy, the Tesla model, god help us, is as good as any path forward. But it is not refined, efficient, or self sustaining.

      So we have a choice. Give all the jobs to the Germans, or subsidize the process.

    • Did you miss the part that said "...including renewable energy sources. "

  • So? (Score:4, Insightful)

    by CrimsonAvenger ( 580665 ) on Monday December 03, 2018 @07:50PM (#57744024)

    If, as is often stated here, renewables are the most cost-effective energy sources, then they shouldn't need subsidies.

    And if they Do, in fact, need the subsidies, then they're NOT the most cost-effective energy sources....

    • Re:So? (Score:5, Insightful)

      by Anonymous Coward on Monday December 03, 2018 @07:57PM (#57744072)

      They need subsides to help get started, especially in markets where local government has given fossil fuel groups massive discounts to operate.

      • Re:So? (Score:5, Insightful)

        by alvinrod ( 889928 ) on Monday December 03, 2018 @08:03PM (#57744102)
        Wouldn't the obvious solution simply be to stop giving fossil fuels a subsidy? The original point is that if something is viable, it doesn't need help. If fossil fuels need help, they're not viable. You don't go around fixing something that's wrong by committing further wrongs. Rectify the underlying problem and the downstream issues will start to resolve as well.
        • Certainly. Also the least achievable.

    • Re:So? (Score:5, Insightful)

      by larkost ( 79011 ) on Monday December 03, 2018 @08:03PM (#57744100)

      There are two problems with your argument:
      1. Non-renwables often come with "external" costs, such as pollution that are not accounted for in their financial costs. Someone is paying those prices.
      2. New technologies often take a lot of work to make practical, again someone needs to pay those prices to make them viable.

      Since we (the U.S. here) have decided not to put taxes (e.g. cap-and-trade) in place to handle those externalities, and we have a history of subsidizing research and development, this is the way we have done it.

      • 1 - That's a reason to tax things that generate externalities, in proportion to the harm they cause to the public. 2 - That's what rich people are for. Rich people pay stupid high prices for new stuff, which pays for the R&D needed to make the next generation of stuff cheaper. Slightly less rich people buy that, and thereby fund making the next gen cheaper yet. Recurse. No subsidy needed anywhere. In fact, subsidy is the root of all evil.

    • Re:So? (Score:4, Insightful)

      by MobyDisk ( 75490 ) on Monday December 03, 2018 @08:04PM (#57744108) Homepage

      I think the standard Slashdot reply is to point out that they are cost-effective if negative externalities (CO2 emissions, pollution) are included. But often they are not.

    • Re:So? (Score:5, Insightful)

      by hawguy ( 1600213 ) on Monday December 03, 2018 @08:09PM (#57744146)

      If, as is often stated here, renewables are the most cost-effective energy sources, then they shouldn't need subsidies.

      The subsidies for fossil fuels are already built-in to our economy so they are invisible, renewables are the newcomer so their subsidies are more explicit.

    • "they're NOT the most cost-effective energy sources"

      Its really cost effective to die. Your costs go down to zero.

    • Virtually nobody buys the most cost-effective vehicle. We mostly follow the crowd. This makes change, no matter how positive, difficult.

      Even if we did buy the most cost-effective vehicle from an individual's POV, there is no logical reason that that would be the most cost-effective vehicle for society. Society has a stake in the game that pure capitalism does not represent. Infrastructure costs, employment of workers, disposal costs, international relations costs, medical costs, etc. do not come into play w

  • Only reasonable if we tax fossil fuels (Score:5, Insightful)

    by Anonymous Coward on Monday December 03, 2018 @07:51PM (#57744028)

    This is only reasonable if we tax fossil fuels. Renewables are generally cleaner than fossil fuels, though not entirely clean. Energy should be taxed based on the costs to repair the environmental damage that has to be cleaned up and the costs of mitigating their impacts. In this respect, fossil fuels are far more expensive and should be taxed at a higher rate that reflects their true costs of use.

    • We do (Score:4, Informative)

      by Solandri ( 704621 ) on Monday December 03, 2018 @09:27PM (#57744640)
      To the tune of about 50 cents per gallon [wikipedia.org]. This far, far exceeds the subsidy oil companies receive, which works out to less than 10 cents per gallon even if you attribute the entire subsidy to gasoline (they make other products with oil too, like kerosene, asphalt, plastics). I think heating oil is the only petroleum product which is generally exempted from taxes (because poor people freezing to death in winter makes bad press for politicians).

      You can argue we're not taxing fossil fuels enough. But it's silly to pretend they're not taxed. As the Tesla EVs are rated at about 30 kWh per 100 miles, at the U.S. average electricity price of 11.5 cents/kWh, that works out to $3.45 of electricity per 100 miles. A 25 MPG vehicle pays $2 in fuel taxes per 100 miles, so its taxes amount to 58% of the electricity price needed to power the EV. In some states with higher fuel taxes, the fuel tax alone is about the same as the cost of electricity to power an EV over the same route.

      • Re:We do (Score:4, Insightful)

        by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Tuesday December 04, 2018 @09:04AM (#57746746) Homepage Journal

        To the tune of about 50 cents per gallon. This far, far exceeds the subsidy oil companies receive, which works out to less than 10 cents per gallon

        It looks like you didn't figure in externalities, like being permitted to pollute like mad bastards. Figure in the cleanup cost (including fixing all the carbon released during the refining process) and get back to us.

    • While there may be tax credits at the Federal level, at least 17 states [greentechmedia.com] charge additional registration fees for electric vehicles once the battery gets above a small (hybrid) battery size.

      They do this to make up for loss gas taxes, but charge for such at a flat rate that does not factor in mileage or if you have a plug-in hybrid.

      So if you purchase your electricity from charging stations which try to be gas-price equivalents, you end up paying more to fuel an electric car than had you just fueled a gas one.

      W

  • End all subsidies (Score:5, Insightful)

    by alvinrod ( 889928 ) on Monday December 03, 2018 @07:52PM (#57744038)
    Fine, but take the rest of the subsidies with them. Whether that's the farmers, the oil companies, the various housing subsidies, or anyone else getting a deal. The U.S. has slowly morphed into a petty kleptocracy where everyone is picking everyone else's pocket. Just end the madness and let the people who are incapable fail. There's no need (other than votes) for the government to try to prop them up.

    • >"Fine, but take the rest of the subsidies with them."

      +100

      Absolutely should, at least at the Federal level.

      >"The U.S. has slowly morphed into a petty kleptocracy where everyone is picking everyone else's pocket."

      That is what happens when the government gets too big and powerful.... which is why the original design was supposed to keep the Fed small.

    • Fine, but take the rest of the subsidies with them. Whether that's the farmers, the oil companies, the various housing subsidies, or anyone else getting a deal.

      Does this include the "red" states that receive more money than they give to the federal government? That's the biggest subsidy of them all. It's also a surefire way to bankrupt most Republican led states.

      • I kind of thought that was implied, but in case it wasn't for the people who want to politically grandstand, "yes". Get rid of all subsidies. If you can't live unless it's at someone else's expense, then throw yourself at the feet of someone else's charity. Demanding the man in Washington shake down the rest of the country for your existence is really just a subtle violation of the 14th amendment.

        • If you can't live unless it's at someone else's expense, then throw yourself at the feet of someone else's charity.

          Yeah, the problem is that there are other interests like national security. Do we really want to find ourselves at the mercy of another nation because they produce our food? Also, we've seen how that works out for people who actually do throw themselves at the feet of someone else's charity: they die. You can say, "well that's how it goes" like a sociopath but that doesn't make it right.

      • Re: (Score:2)

        by geek ( 5680 )

        Since when is giving your money to the federal government considered a good thing? FFS really? That's the hill you choose to die on?

        • Since when is giving your money to the federal government considered a good thing?

          Since it started being used to pay for federal programs. Do you think the military is a charity? Do you think we shouldn't fund the military at all? That speaks volumes about you.

      • Yes, end all the subsidies completely. Make them unconstitutional (which they technically are already) and enforce it this time.

        BTW, the "red" states only receive more money than they give if you count things like military retirement benefits to individuals and federal poverty programs as part of the accounting. If you're counting medicare/social security, you're basically just looking at which states people retire in, not some subsidy to the state itself. Otherwise, it's the reverse. So yeah, feel free to

  • Either the people who say renewable energy is now cheaper than fossil fuels are right or not. I'll keep an eye on my energy company Xcel.

  • Last time I checked, the US Constitution says it's Congress, specifically starting in the US House of Representatives, that makes laws.

    Presidents who don't control the House have very very very little power.

    They're Weak.

    Sad.

    Maybe he should try getting an actual trade deal with China, because the Chinese translation of the "deal" says he has no deal, so he's just being Weak. Again.

    Take that and stuff it in your Denial pipe.

  • Put the money into new Nuclear Energy (Score:4, Insightful)

    by Anonymous Coward on Monday December 03, 2018 @08:05PM (#57744122)
    We should give generous subsidies to nuclear energy. Minor subsidies should be given to current reactors to keep them above water. Major subsides (100's of billions to start) should be spent on next generation nuclear. NuScale has passed phase 1 of the NRC review, and their first 12 SMR's are going to be built in Idaho. We should heavily subsidize this project and all future ones. We should also subsidize other 4th generation nuclear when their reactors pass nrc review. If and only if we do that, we will have a chance at mitigating climate change.
    • I like nuclear, but if it isn't viable without subsidies, then why should anyone who doesn't like it have to pay for it? By all means, remove the various roadblocks that have been unfairly enacted, but don't subsidize it either. Like anything else, give it a level playing field, and let it compete fairly. If something else does a better job, then that's what should win.

    • Re: (Score:2)

      by orzetto ( 545509 )

      Yay, more subsidies to nuclear! An industry that has lived on gigantic subsidies since the 40's and has never spouted out a single fully non-subsidised, private-funded plant anywhere in the world, that still promises only economic disaster with yet another generation of miserable failures like the now-legendary 3rd+-generation Olkiluoto 3 [helsinkitimes.fi], 10 years late and procrastinating (I am thrilled to see whether they break the record of Duke Nukem Forever, they are quite close), while renewables have a proven track r

  • A correct URL for the story (Score:5, Informative)

    by NothingWasAvailable ( 2594547 ) on Monday December 03, 2018 @08:09PM (#57744144)

    The URL in the top post leads to a story about trade talks. Different source, but the material about subsidies.

    https://www.bloomberg.com/news... [bloomberg.com]

    • Thank you for posting a link about electric car subsidies. It appears to be true that Slashdot readers do not click the links and read the articles. I had to scroll a long ways to find this link. Thanks for posting the link.

  • And cut the $20B/year from fossil fuels (Score:5, Insightful)

    by Art Challenor ( 2621733 ) on Monday December 03, 2018 @08:10PM (#57744154)
    $20 billion per year in DIRECT subsidies for fossil fuels, not including cleanup, military spending, health care costs and similar. https://www.vox.com/energy-and... [vox.com] As long as you remove the $20B fossil fuel subsidy, you can level the playing field and remove the ~$7B from renewables. There's no question where the investments will be going forward.

    • So that accounts for 1% of the price of a gallon of gas. Now how about the 25-30% of a gallon of gas which goes to special gas taxes? How do you account for that in your "subsidy" calculation?

      Yeah, thought not. But sure, subsidies are actually higher for "renewables" than you state, so let's get rid of all of them and let the market sort it out. I'm good with that.

  • In the name of "man made" Global Warming!!!! Oh noes!!!

    (I do not like welfare. For individuals AND companies.

  • While they're at it ... (Score:3)

    by fahrbot-bot ( 874524 ) on Monday December 03, 2018 @09:22PM (#57744612)

    Perhaps they'll also kill the (up to) $12 Billion in subsidies [reuters.com] to farmers getting hammered by the Administration's own tariffs. Oh, wait ...

  • Huge advantage for Electric Tanks. Less that can go wrong, More space for shells... ect... Keep the subsidies/ tech improvements coming. :)

  • Those of us with solar panels on our roofs in states that offer "SREC" credits should already be used to this....

    Once promised as a great way to make your solar panels pay for themselves, SRECs are now practically worthless in every state with the program, except for maybe Washington DC. (That's only true there because a lot of people can't put solar panels up since they rent or live in multi-level properties where they don't own rights to put things on the roof. And another big segment of DC is too poor to

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