free market should drive electric vehicle sales not the government
“I believe Alabama is uniquely positioned to be a leader in the EV industry.”
Those were the words of Alabama Governor Kay Ivey delivering the opening remarks at the Drive Electric Alabama EV Summit this past week. She continued, “We need to lean in on this new technology for the sake of our economy tomorrow.”
The two-day summit, which targeted electric vehicle initiatives in Alabama and provided information on charging infrastructure, comes ten months after the Alabama Department of Economic and Community Affairs (ADECA) alongside Governor Ivey launched Alabama Drive Electric, the state’s electric vehicle (EV) education and marketing program.
At the launch in November 2021, ADECA director and state cabinet member Kenneth Boswell stated, “It’s clear electric vehicles represent the next generation of automobile manufacturing.”
In 2021, Governor Ivey awarded 18 grants totaling more than $4.1 million in a combination of legislature-appropriated funds and Volkswagen settlement funds to install electric vehicle charging stations across the state.
According to ADECA, which administers the EV Infrastructure Program, Alabama allocated $1 million for FY2021 and $2 million for FY2022 for charging stations. The state also allocated $1 million both years for EV education.
In addition to state funds, as part of the Biden administration’s Infrastructure Law, Alabama expects to receive $79,308,285 through the five-year National Electric Vehicle Infrastructure Formula Program with $11,738,801 already apportioned on February 10, 2022.
According to the U.S. Department of Energy, in Alabama, “government and non-government entities are eligible to receive up to $500,000 for the installation of direct current fast charging (DCFC) stations along Interstate 22 in Alabama. ADECA also offers grants of up to $250,000 for the installation of Level 2 or DCFC stations along non-interstate corridors.”
Furthermore, under the federal Inflation Reduction Act, the IRS provides EV drivers in Alabama with a commercial EV tax credit, up to $7,500 for smaller vehicles and up to $40,000 for larger vehicles.
A marketing campaign, the creation of a new state department, a summit, grants and subsidies, and millions of federal and state tax dollars have been allocated to the expansion of EVs in Alabama.
The incentive has been created. Why the strong push for electric vehicles in Alabama?
These “incentives,” in the form of government subsidies, have been utilized to create a market for electric vehicles. In reality, the market’s demand for electric vehicles doesn’t match the current interest with government regulation and subsidies. This created demand isn’t a free market exercise, but it is being government manufactured with hundreds of billions of dollars in deficit spending.
According to the Alternative Fuels Data Center, statewide, Alabama had a mere 2,890 EVs in 2020, 0.05 percent of overall vehicle registrations. In 2021, Alabama increased EV registrations to 4,757, but it still represents a negligible presence on our roadways.
There are obvious downsides to EVs in comparison to traditional gas vehicles:
- Limited driving range
- Limited battery life
- High costs (even with tax credits)
- Additional demands placed on existing electric grids
- Questions about where and how to dispose of old batteries
- Questions about the overarching environmental impact of producing EVs
Even if market demand was there, is an exclusive EV option really what’s best for all of us? For example, are EVs feasible in cases of a hurricane or other evacuation scenarios? If there isn’t electricity, EVs cannot charge. In comparison, gas vehicle owners can keep a spare gas can in their garage and fill up the car’s tank to safely leave town in time. Does it make sense to put diesel generators next to all charging stations as a backup?
Would the market support this industry without these incentives? It would probably be a growing industry, but would not look anything like what we are currently witnessing. It is no surprise there would be less of a market for the electric vehicle infrastructure without federal and state incentives.
Electric vehicles have become a government-regulated industry. Do automobile companies and state governments have an opportunity to not invest in electric vehicles?
Last week, Hertz, an American rental car company, agreed to purchase up to 175,000 electric vehicles from General Motors (GM) over the next five years. This contributes to the company’s goal of having one-quarter of its fleet being electric by the end of 2024. Hertz has also teamed up with BP Pulse, the global electrification and charging solution brand of multinational oil and gas company BP, to build electric charging stations for its fleet across North America. Ambitiously, GM, the largest U.S. automaker, announced its plans to sell only vehicles that have zero tailpipe emissions by 2035, phasing out petroleum-powered cars and trucks. This is all part of GM’s plan to be carbon neutral by 2040 in its global products and operations.
As seen by Alabama’s initiatives, major corporations aren’t alone in the shift from gas-powered vehicles to EVs. California is the state with one of the most drastic EV measures. The Golden State is committed to 100% new zero-emission vehicles by 2035.
This is not to say electric vehicles don’t have any advantages. However, the free market should decide the advantages of electric vehicles, not the government through regulations and mandates.
It feels like the entire nation is rushing to transition everyone away from gas to electric cars. The federal government is spending money anywhere and everywhere to make this a reality. At the same time, state governments, utilities, and manufacturing companies are all too excited to spend this money. This is all being done to minimize the amount of carbon dioxide emissions to keep the earth’s temperature from increasing. We are being told we are in a crisis and must act fast. The United Nations’ own climate model claims that the hundreds of billions of dollars allocated for this climate emergency from the Inflation Reduction Act calculates that if no additional funding is provided past 2030, the global temperature will be reduced by .0009 degrees by the end of the century. Is this a good return on investment?
If Alabamians want to buy an electric vehicle they should be free to do so, but the free market should drive the demand. With the federal government’s appetite to spend money it doesn’t have, it is power is powerful enough to influence state governments, utility companies, automobile manufacturers, and ultimately even limit an individual’s freedom to drive the car of their choice.