Widespread adoption of electric vehicles would save drivers billions of dollars in fuel costs and greatly reduce emissions. We need smart government policies that incentivize investment in clean vehicle technology to get there. Unfortunately, support for electric vehicles in Georgia is under attack in the General Assembly.
Electric vehicles are helping drivers save money, reduce the nation’s dependency on imported oil, and cut vehicle-related emissions. Spurred by smart policies like the Georgia Low Emission Vehicle Income Tax Credit, our state has become one of the fastest-growing markets for these vehicles. Atlanta has the second-highest percentage of plug-in EV registrations among major U.S. metropolitan areas, and Georgia has the second-highest number of plug-in EVs of any state in the country — an estimated 20,000.
The benefits of electric vehicles extend beyond merely providing consumers with more choices in the showroom. Analysis shows EVs save Georgia drivers $10 million a year in fuel, avoiding the purchase of 4.5 million gallons of gasoline and reducing emissions. Continued support of the electric vehicle tax credit would help these savings grow even larger, as more models are introduced and sold in this state.
Electric vehicles cost less to fuel compared to gasoline vehicles and, according to state and national analyses, spending less on fuel allows households to spend more on other things. EVs thus provide direct economic benefits to Georgia by enabling their owners to direct their fuel savings to local businesses that create local jobs.
Moreover, the money electric vehicle drivers spend on electricity goes to power companies that employ Georgians and pay local taxes. In contrast, most of the money drivers spend to fill up conventional gasoline vehicles pays for crude oil, which is extracted and refined outside Georgia.
The Georgia Department of Economic Development prepared an economic analysis that determined the tax credit yields a net positive cash flow for the state. For every 1 percent of petroleum-based miles traveled in Georgia displaced by electric vehicles, approximately $210 million dollars remains in the state. This equates to approximately $2,000 in annual fuel savings reinvested in the Georgia economy, more than compensating for the initial $5,000 EV tax credit by the state.
Despite the economic and deployment impacts of the tax credit, detractors say the credit is too expensive for the state budget, that it over-subsidizes electric vehicles to the detriment of other programs and residents, and that EV owners do not pay their fair share of road use taxes. Recently proposed solutions include reducing the value of the credit, capping the number of incentives the state approves annually, or eliminating the credit.
House Bill 122 would eliminate the current tax credit for electric vehicles as of July 1. Fortunately, a bill to continue and expand the tax credit will soon be offered. Responding to concerns expressed by the Legislature in previous years, the current tax credit would be lowered to 10 percent, capped at $3,000, for battery electric vehicles and plug-in hybrids like the Chevrolet Volt, and $2,000 for plug-in hybrids like the Ford Fusion PHEV and Ford CMax Energi with smaller battery capacities.
Georgians need to ensure the pro-tax credit bill passes.
Don Francis is executive director of Clean Cities Georgia.