Are Biden’s Plans for Electric Vehicles Worth the Money?

April 14, 2021 by Alexa Hornbeck
Electric vehicle charging stations on Interstate-95. (Photo by Dan McCue)

WASHINGTON – On Monday, Biden held an infrastructure meeting to work on a compromise between the Democrats and Republicans, but representatives like David Price, D-N.C., told reporters that, “the main obstacle for a bipartisan deal is how to pay for it all.” 

The proposed $2 trillion-plus infrastructure plan includes $174 billion towards Electric Vehicles, which Biden says are critical to the success of the EPA’s zero emission vehicle plans. However, the money spent on electric vehicles will be more than America’s roads, bridges, ports, airports and waterways combined. 

“We need a strong, diversified and resilient U.S.-based electric vehicle battery supply chain, so we can supply the growing global demand for these vehicles and components – creating good-paying jobs here at home, and laying the groundwork for the jobs of tomorrow,” Biden said in a written statement Sunday. 

“As a rough approximation, the plan would generate 1 million to 1.2 million jobs per year in the energy efficiency and renewable energy space,” said Robert Pollin, an economics professor and co-director of the Political Economy Research Institute at the University of Massachusetts-Amherst. 

While changing the EV infrastructure would lead to the creation of jobs, it would also lead to a loss of jobs. 

“There will be huge new jobs in the EV field, but we also need careful planning for current workers in the combustion-specific fields, in order to reduce the likelihood of displacements,” said Lawrence Baxter, a member of the Regenerative Crisis Response Committee. 

“The plan focuses on the two most critical elements, more efficient and less environmentally damaging batteries are the key,” said Baxter. 

Biden’s proposed plan invests $17 billion for companies to retrofit factories and facilities for EV production. It will also provide incentive programs, increase tax credits, ramp up the supply chain, expand the power grid, invest in the refinement of raw materials, boost battery production, and create 500,000 electric vehicle charging stations by 2030. 

“The vision is to switch the entire vehicle fleet to electric, and at the same time switch the electricity grid to renewable. That’s where we have been going the past 10 years with different policies,” said Benjamin Leard, a university fellow at Resources for the Future and an assistant professor at the University of Tennessee. 

Five years ago, federal tax incentives for EVs totaled $725 million, but tax credits ran out in 2019-2020 for two of the largest EV manufactures, Tesla and General Motors, because of a policy restriction stating if an automotive manufacturer sold over 200,000 EVs the tax credit would go away. 

“They are being penalized because of an existing law, you don’t want to have a subsidy forever, but cutting them off at 200,000 sales is not a large number of vehicles,” said Jack Barkenbus, a visiting scholar at the Institute for Energy & Environment, Vanderbilt University. 

The Growing Renewable Energy and Efficiency Now Act, known as the Green Act, plans to increase the cap to 600,000 for vehicles purchased since 2010, but still reduces the credit by $500 after the first 200,000 vehicles are sold. 

“We’re going to provide tax incentives and point-of-sale rebates to all American families,” Biden said the day he unveiled the infrastructure plan. 

The plan includes funding for up to $7,500 in federal tax credits to EV buyers for qualifying EVs. 

“With Biden’s plan, they are talking about having a rebate at the time of sale of the purchase,” Barkenbus said. 

Expanding on the “Cash for Clunkers” plan from the Obama era, Senate Majority Leader Chuck Schumer, D-NY, called for point-of-sale rebates for Americans to receive substantial point-of-sale discounts when trading in gasoline or diesel-powered cars for a new EV. 

“The ultimate goal is to have every car manufactured in America be electric by 2030, and every car on the road be clean by 2040,” said Schumer in an interview with The Verge. 

“There are two reasons why people do not buy electric cars, there aren’t that many different varieties, and they are just more expensive than a typical gasoline car. A subsidy would help to narrow that gap,” said Leard. 

The lack of the variety in EV models available for purchase, such as limited Sedan options, will change, “once automakers start producing electric vehicles that Americans want to buy then we will see sales pick up,” said Barkenbus. 

Half of the electric vehicles in the country are currently sold in California, and last September, the state set aggressive policy measures to force automotive industries to produce more electric vehicles by banning new sales of internal combustion cars by 2035. Now, states like Massachusetts have followed California’s lead by issuing a similar executive order. 

“The conventional car is twice as polluting as an electric vehicle,” said Barkenbus “The battery-powered electric vehicle will, in almost all cases, reduce pollution at the average rate.” 

There are currently about 645,000 internal combustion vehicles on American roads, and Biden plans to replace all of them with American-made electric vehicles. However environmental health and policy researchers say the administration needs to pay close attention to cleaning up the electricity grid, as 63% of our electricity comes from burning fossil fuels, like coal and natural gases. 

“We are rapidly getting off coal, as it is the biggest CO2 producer, and have reduced reliance on coal substantially. About 18 or 19% of our electricity in the U.S. is generated by coal, where at one time it was 40-45%. The more we can clean up electricity, the cleaner electric vehicles will be,” said Barkenbus. 

“Over the next 10 years, EVs will be much greener than they are now. It takes time and effort to get the infrastructure together, like getting battery prices down, but otherwise we will never get there,” said Leard. 

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