The impact also can be seen in the decline of specialty license plate sales for alternative fuel vehicles, which are tied to the registration fee. Every all-electric vehicle — as well as some other alternative fuel vehicles — is subject to a $200 fee. Owner of such cars can opt to get the specialty license plate in return, giving them access to Atlanta’s HOV lanes.
However, since the change in state policy, monthly license plate sales are down nearly 60 percent.
For champions of the clean-fuel cars, the statistics are sobering.
“We should be around 40,000 vehicles now,” said Jeff Cohen, founder of the Atlanta Electric Vehicle Development Coalition. “We’re not growing.”
Backers of alternative fuel vehicles like Cohen have complained that lawmakers turned one of the friendliest states to the electric car into one of the least hospitable.
“According to the Georgia Department of Revenue, sales and leases have dropped over 90 percent,” said Public Service Commissioner Tim Echols, a proponent of the tax credit and owner of two electric cars. “The tax credit was key to our growing this market.”
Severe Weather Team 2 meteorologist Brian Monahan learned changes in the laws caused sales to plummet.
No one disagrees with that, but it made some conservative lawmakers uncomfortable. Sen. Butch Miller, R-Gainesville, served on a special joint study committee created last year to look into alternative fuel vehicles and said the dramatic decline shows the tax credit only propped up an industry that didn't have wide consumer support.
“Our previous electric car tax credit was too generous, too rich. We have to strike a balance on what is good for the economy, what’s good for the environment and what’s good for the consumer,” said Miller. “It should be market driven, and a free-market approach answers a lot of questions.”
Sen. Butch Miller, R - Gainesville, served last year on a joint study committee on alternative fuel vehicles. The committee returned no specific recommendations, despite pleas from advocates to reinstate a tax credit for purchasing electric cars. Miller said the free market should govern which cars Georgians buy. BOB ANDRES / BANDRES@AJC.COM
Credit: Bob Andres
Credit: Bob Andres
Credit not likely to be revived
Attempts last year to reinstate a version of the tax credit failed, and the joint study committee met three times last year and issued no recommendations. And Miller made it clear the committee was taking a wait-and-see approach to any new measures.
"At this point it's really fluid because we are still working on trying to develop the right kind of policy that will move us forward," Miller said. "With energy prices at their current state, it's difficult for people to justify the investment in alternative energy and that has slowed the pace of our exploration."
Advocates hoping the state would consider new incentives got little encouragement from the study committee.
“I’m going be as generous as I can,” said Don Francis, director of Clean Cities Georgia, a federally supported initiative. “I was disappointed at how they approached it and what the output was.”
Francis testified at the final meeting of the study committee that the elimination of the tax credit was costing both consumers and the state money as drivers spent more on gasoline and most of those dollars left the state.
Francis said it was pretty clear the committee wasn’t interested in revisiting the tax credit and instead focused on what the state could do to support business uses for alternative fuels while supporting refueling and recharging infrastructure.
There are no disinterested parties here. Miller, for example, is a car dealer and not for Tesla. Cohen is North American sales manager for General Electric’s vehicle charging stations. Car companies like Chevrolet and Nissan, which produce the most popular all-electric cars, are weighing in as well.
Sales of specialty license plates for alternative fuel vehicles plunged when the General Assembly removed a $5,000 tax credit for electric cars in 2015, as figures from the Georgia Department of Revenue show.
Registration fee highest in nation
But there are legitimate policy questions too.
Should the state put a thumb on the scale to entice consumers to buy one type of car over another? Are consumer tax credits bad policy generally? Doesn't the state have an obligation to address air quality and climate change by encouraging clean energy?
Francis, Cohen and others who want more state support for electric vehicles are retooling and focusing heavily on the annual registration fee. The fee, which this year will be slightly above $200, is meant to offset the gas tax which electric vehicle owners obviously do not pay but go to fund repairs on the roads everybody uses. However, the indexed fee, which this year will be slightly above $200, is the highest in the nation and there appears to be some support for lowering it.
“I think that’s a realistic priority,” Cohen said.
Cohen is bullish on electric cars (he owns three) and believes that sales will slowly rebound on their own, particularly if the lawmakers reduce the penalty to something less punitive.
“I’d rather see the registration fee addressed to maintain our population,” he said. “I’d rather not fight for a tax credit that market data may not prove we need.”
Francis said there may be a way to return a portion of the tax credit’s incentive by giving buyers a break on sales tax at the point of purchase.
“A lot of states are doing sales tax exemptions rather than credits,” he said.
Whatever the outcome, unless policy changes soon, Georgia’s unlikely position as No. 2 on the electric car rankings (way, way, way behind No. 1 California) likely is doomed.