Texas applauds free-market move on electric vehicles

Federal tax breaks of as much as $7,500 per vehicle could end under the GOP-led overhaul.
By Daniel J. Graeber  |  Nov. 3, 2017 at 6:07 AM
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Nov. 3 (UPI) -- A Texas energy regulator said a proposal to eliminate federal tax breaks for electric vehicles keeps the government from falsely distorting the energy market.

At least six sections of the 429-page bill meant to overhaul the federal tax code extend into the energy sector. While some considerations are extended for solar and small-wind energy projects, a tax break for electric vehicles would expire for those vehicles placed into serve at the beginning of the 2018 tax year, if the measure passes.

The bill was introduced Thursday by U.S. Rep. Kevin Brady, R-Texas, the chairman of the House Ways and Means Committee. On Tuesday, the Texas Railroad Commission, the state energy regulator, said the tax break for electric vehicles was an attack on the energy industry.

"I have been impressed with the leadership our Texas delegation in the House and Senate has taken on issues of energy," Texas Commissioner Wayne Christian, a Republican, said in a statement after the bill was introduced. "I look forward to ... work[ing] with them in the future to ensure Texas continues to create jobs and economic growth."

Christian said the subsidies are "feel-good" tax breaks that have few tangible impacts on the environment. The International Energy Agency, however, notes that 23 percent of global greenhouse gas emissions come from the transportation sector.

"Electrifying road transportation has multiple benefits, including the reduction of emissions of local pollutants and noise and the promotion of energy security and decarbonization through increased energy efficiency and diversification," an IEA report read.

The federal subsidy offers as much as $7,500 in tax credits per vehicle. The Texas commissioner, however, said it distorts the market, adding he was pleased his state counterpart took up free-market principles at the federal level.

"Additional subsides exist at a state level, and I hope Texas has a similar discussion prior to the next legislative session," he said.

The IEA said electric vehicle sales are on the decline, though recent gains have been impressive. Growth in sales in 2015 was 77 percent, but below 50 percent from their 2010 levels last year. By the IEA's estimates, electric vehicle sales "have a long way to go" before reaching a market portion large enough to put a dent in oil demand or greenhouse gas emissions.

In October, Colorado Gov. John Hickenlooper led a handful of Western state leaders in unveiling plans to support an electric-vehicle corridor across more than 5,000 miles of highway. About 2 percent of new vehicle sales in Colorado are plug-ins and Hickenlooper's office estimated clean-energy jobs support more than $3.5 billion in wages.

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