A Green Car Named Desire

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A testimony to retarded liberal policies that will lead this nation towards Detroitism.

A Green Car Named Desire
Electric car subsidies for the rich are now a drain on California's budget.

California's green regulations often drive national policies, so it's worth pointing out how its programs to cut vehicle emissions have become a gravy train for the 1%. You'll enjoy this if you live in the other 49 states.

To meet the state's goal of cutting its greenhouse emissions to 80% below 1990 levels, effectively all new cars sold in California by 2040 will have to be electric or plug-in hybrids. As a regulatory weigh station, Governor Jerry Brown has ordered that 1.5 million zero-emission vehicles "be on California roads" by 2025. That last bit is the immediate rub.

Car makers are compelled by the California Air Resources Board to increase their electric fleets to meet these mandates. However, the battery-powered cars have been duds with most consumers. So the board has graciously allowed manufacturers to comply with its diktats by buying "credits." Palo Alto-based electric car maker Tesla has made a $119.5 million killing (300% of its net income) this year from hawking its excess credits.


Maybe this is why Tesla finally had a profit?


To get more electric cars on the road, the state also offers consumers $2,500 rebates financed by a $20 "smog abatement fee," which all drivers in the state must pay for their first six registration years. The rebate is on top of the $7,500 federal tax credit and $1,000 or more the state pays drivers to retire their gas guzzlers. The combined government incentives can reduce the price of a Nissan electric Leaf to about $18,000.

But wait: According to state survey data, the typical rebate recipient earns over $150,000 and owns at least one other non-electric car. About 80% hail from the Bay Area, Los Angeles and Orange County. The most popular car among rebate recipients this year has been Tesla's Model S sports sedan, which runs between about $70,000 and $100,000.

As a side note, California last year also awarded Tesla a $10 million grant to develop its Model X SUV and $756,000 in funds for "workforce training." As a recent state assembly analysis of the vehicle subsidies notes, "everyone benefits from clean air, but some of the beneficiaries are more equal than others."

Meantime, demand for rebates among the well-to-do is surging, which has created a funding squeeze. In March, the state had to create a waiting list. While the legislature appropriated an additional $15 million for rebates in June, the program is already running on empty and needs at least $30 million more to meet demand in the coming year.


To recap: California's emissions mandates are so onerous that they require mandates for electric cars that consumers won't buy without subsidies that go mainly to the wealthy and that are now so expensive that they have become another drain on the state budget. Look for the middle class to be hit with a fee or tax increase to make up the difference.

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