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As federal tax credits for EVs are phased out, Ohio looks for new incentives

As federal tax credits for EVs are phased out, Ohio looks for new incentives

Federal tax incentives are winding down as automakers hit 200,000 in sales of electric vehicles. EVs aren’t mainstream yet, but work is being done in Ohio to encourage drivers to go electric.

The federal tax credit for Tesla customers ends Dec. 31.

Chevy isn’t far behind. The tax incentive to buy an electric vehicle from that General Motors brand, originally $7,500, is now $1,875 and expected to zero out by the end of March.

Why? Those automakers have sold their 200,000th electric vehicle each, making the sweetener less necessary. After reaching that benchmark, the incentives were halved to $3,750 for six months, then halved again to $1,875 for another six months. Then they disappear. Nissan Leafs have yet to hit that sales number.

The tax credits, which were introduced in 2010, initially give drivers between $2,500 and $7,500, depending on the size of the battery pack.

No manufacturer’s credit has phased out yet.

The pending elimination is bad news for buyers but good news for manufacturers. Electric cars, which are quiet and quick, are slowly becoming more common on Columbus roads, whether it’s a sleek Tesla or a compact Leaf or Chevy Bolt.

Although tax incentives have helped fuel the budding popularity of electric cars, the vehicles have plenty of other selling points: They never need gas, they have no tailpipe emissions, and they have far fewer engine parts to service or replace.

“It’s really cool-looking, it’s fast and it saves on energy and fossil fuels,” said Andy Gottesman, 30, of Grandview Heights, who bought a Tesla Model 3 in 2018. “When I purchased it, I was able to get the tax credit, which helps make it a little more affordable as well.”

What makes many people pause about going electric is the range: How many miles can you drive before you need to recharge the battery? Gottesman doesn’t own a level 2 charger — a more powerful outlet — at his home.

“I don’t have a good charging solution at my house. I just plugged into a normal outlet, which charges the car very slowly. I think that would add even more range anxiety. (But with) the supercharged network in Columbus and taking advantage of public infrastructure, I’ve literally never had an issue. I’ve driven all over the Midwest,” he said.

Part of that is the work that Smart Columbus — a city initiative to reshape transportation — is doing by pushing for more charging stations throughout the city and encouraging developers to put them in homes being built. Builders are advised to install charging stations in at least 10% of their parking spaces.

M/I Homes, where Gottesman works, built The Homes at Grandview Yard and installed stations for each residence.

“It’s responsible for us as a community to be thinking about this because this is a market shift that’s happening,” said Jordan Davis, director of Smart Columbus. “How do we make sure that every new development is prepared for this and we’re not going back and retrofitting?”

The electric revolution has devout followers. The city of Columbus has 111 fully electric Leafs and Bolts for city employees. (It also has 89 hybrids.) Yellow Cab added 10 Teslas to its fleet in July.

Drivers such as Gottesman view the car as an extension of the latest technology they embrace, but the movement is slowly becoming more mainstream.

“This is a pretty well-educated population. The demographics are perfect for EVs. Most people in central Ohio commute within this area,” said Dave Voss, sales manager at Dave Gill Chevrolet. “The Bolt is great for commuting, you know — 251-mile range for the 2020 model. You can get anywhere you need on a daily basis, and you spend … 30 bucks a month on electricity.

“So the demand is there. I think it’s latent demand. And I think it’s the combination of those two things, inventory and incentives, that would have to come together to really create a kind of environment to harvest this kind of technology,” he said.

Automakers push most of their electric vehicles on the East and West coasts. Coastal states such as California have zero-emission-vehicle requirements, pushing drivers to go electric.

Ohio has no such requirement and does not offer a tax incentive for electric cars. A bill proposed this month could change that.

State Sens. Sean O’Brien, D-Bazetta Township, and Michael Rulli, R-Salem, have proposed creating sales-tax credits of $500 for the purchase of one EV for personal use; $1,000 for each of up to 10 vehicles for commercial use; and $1,500 for the construction of charging stations for either commercial or personal use.

Those incentives would go away after five years, when the electric-vehicle market is expected to be more robust. The bill soon will be assigned to a Senate committee.

There an incentive for Ohio to back electric vehicles. On Dec. 5, Gov. Mike DeWine announced a $2.3 billion investment by GM and LG Chem to produce battery cells for electric vehicles, which would create an estimated 1,100 jobs in the Lordstown area. In November, it was announced that Lordstown Motors, an electric-truck manufacturer, had bought a former GM plant and plans to start production in 2020. That would result in about 450 jobs.

“We see an opportunity to make Ohio the EV capital not only of the country, but the world,” O’Brien said in a statement. “While this bill is just one step along the path toward achieving that, we feel it is an important one.”

For early adapters such as Gottesman, the tax incentives help.

“I think there’s the perception, though, that the tax credits help with buying a $60,000 car — that it’s really subsidizing a product for people who are able to afford it anyway,” Gottesman said, noting that there are more-affordable electric brands. “But I really see that as a way to get people to embrace a new technology that they may not have otherwise been able to.”

Source: Dispatch

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