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 |  Subject: Elon Musk is right. Congress has no business micromanaging the automotive future.  Tue Sep 28, 2021 8:47 pm | |
| Government has greatly aided electric-car impresario Elon Musk’s rise to multibillionaire status. Federal loans and tax credits, plus state-level incentives, helped launch Tesla and fuel its expansion.
Of Tesla’s reported more than $1.5 billion in profit during the first half of 2021, $872 million — nearly 60 percent — came from selling government-awarded “regulatory credits” for zero-emission cars. Other carmakers have to buy them to comply with clean-air rules, in both the United States and abroad. Essentially, it’s a tax on Tesla’s competitors, payable to Tesla.
So it takes chutzpah for Musk to gripe that Congress’s latest clean-vehicle subsidy plan treats him unfairly. Even more galling: He’s got a point.
The House Ways and Means Committee recently approved a bill, part of Democrats’ $3.5 trillion climate-and-social-policy package, that would significantly expand tax credits to purchasers of electric cars, but reserve the biggest subsidies — by far — for union-made vehicles. (A similar proposal is under Senate consideration.)
For the next decade, buyers would get $7,500, plus $500 if the car contains an American-made battery, with no limit on how many of each manufacturer’s cars qualify.
Current law phased out credits for companies after they sell 200,000 electric vehicles, so in that sense the change is a boon to Tesla, which, along with General Motors, has already surpassed the cap.
Models assembled by members of the United Auto Workers (UAW), however, would get $4,500 extra — not good for nonunion Tesla.
The measure, estimated to cost $33 billion over 10 years, goes beyond spurring the green-car transition to fine-tuning it, for the benefit of a key Democratic interest group, the UAW. With its membership in long-term decline, the union frets that electric cars — mechanically simpler than gas-powered equivalents, and thus less labor-intensive to build — will not be a font of “green jobs.” Last year, the UAW issued a report arguing that EVs could reduce labor requirements by 30 percent, and advocating government intervention to protect what it called “high road” labor standards in a possibly shrinking automotive workforce.
Hence, the new bill. “Not obvious how this serves American taxpayers,” Musk fumed on Twitter, shamelessly, but not inaccurately. The public’s interest in lower carbon emissions does not depend on who made a given electric car, or where.
In addition to Tesla, the proposal disadvantages Japanese, Korean and European carmakers, whose plants in the United States are generally nonunion and employ about a third of the country’s nearly 400,000 autoworkers.
If anyone should complain, it’s Volkswagen, which has plans to build an electric crossover, the ID.4, at its Chattanooga, Tenn., plant. It’s nonunion — because the workers themselves voted twice, in 2014 and 2019, to reject the UAW. The bill sends a pretty strong message to workers who exercise their right not to organize.
And indeed, the international automakers, as well as the dealers that sell their cars, are starting to mobilize against the bill. They object not only because it could hurt sales of their products, but also because it includes a dose of old-fashioned protectionism: Imports would qualify for the minimum $7,500 credit only until 2027. After that, vehicles not made in the United States get no subsidy.
Of all currently available electric models, only the Chevrolet Bolt, made by General Motors at a UAW plant in Michigan, would qualify for the maximum $12,500 tax credit during the bill’s 10-year life span. Even Ford’s Mustang Mach-E would run afoul of the 2027 limit on imports: Despite its American brand name, it’s assembled in Mexico.
No one can accuse the bill’s authors of fetishizing quality, though: The Bolt is under recall, due to its batteries’ dangerous tendency to catch fire. GM says a fix will be available by mid-October.
Then there is the problem of transferring resources from the public in general to those well-off enough to afford a new electric car, which are more expensive than comparable gas-powered models.
The bill allows the credits to individuals with $400,000 or less in adjusted gross income, to buy cars priced at no more than $55,000. The allowable prices for vans, SUVs and pickup trucks would be $64,000, $69,000 and $74,000, respectively. That’s a lot of legislative complexity — and, still, a lot of federal help to a lot of upscale people.
It’s impossible to know the precise outcome of the impending lobbying, which pits not only automakers and their workers, but also companies and countries, against one another.
What has already been revealed, though, is a tension between two oft-proclaimed goals: global cooperation against climate change on the one hand and “winning the future” for American workers and companies on the other.
The best solution would be to scrap targeted subsidies and enact a carbon tax, leaving businesses and consumers free to innovate around that fuel-saving incentive. This is also the solution that Congress, Democrats and Republicans alike, has so far ruled out.
.https://www.washingtonpost.com/opinions/2021/09/28/elon-musk-is-right-congress-has-no-business-micromanaging-automotive-future/
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Anarcho-Capitalist, AnCaps Forum, Ancapolis, OZschwitz Contraband
“The state calls its own violence law, but that of the individual, crime.”-- Max Stirner
"Remember: Evil exists because good men don't kill the government officials committing it." -- Kurt Hofmann |
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