Tuesday, June 25, 2013

Even With Tax Credits, Consumers' Lifetime Costs Of An Electric Vehicle Are Higher Than A Conventional Vehicle Of Similar Size And Performance: CBO

Posted by Milton Recht:

From CBO's presentation at 2013 EIA Energy Conference, hosted by the U.S. Energy Information Administration of the Department of Energy, "CBO Discusses the Effects of Tax Credits for Electric Vehicles at Energy Conference" posted by Ron Gecan, analyst in CBO’s Microeconomic Studies Division, June 24, 2013:

At current vehicle and energy prices, the lifetime costs to consumers of an electric vehicle are generally higher than those of a conventional vehicle of similar size and performance, even with the tax credits, which can be as much as $7,500 per vehicle. That conclusion takes into account both the higher purchase price of an electric vehicle and the lower fuel costs over the vehicle’s life. The additional tax credit that would be required for electric vehicles to be cost-competitive with other vehicle options is smaller for electric vehicles that have small batteries or that are substituting for vehicles with low fuel economy.
However, the tax credits have other, indirect effects: Increased sales of electric vehicles allow automakers to sell more low-fuel-economy vehicles and still comply with the federal standards that govern the average fuel economy of the vehicles they sell (known as CAFE standards). Consequently, the credits will result in little or no reduction in the total gasoline use and greenhouse gas emissions of the nation’s vehicle fleet over the next several years. As a result, the cost per gallon or per metric ton of any such reductions will be much greater than the cost calculated on the basis of the direct effects alone. However, over the longer term, the tax credit can affect total gasoline consumption and emissions if future revisions to CAFE standards are influenced by current sales of electric vehicle and expectations about future sales. [Emphasis added.]

No comments:

Post a Comment