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How President Biden's energy subsidies for electric vehicles are hurting consumers

How President Biden’s energy subsidies for electric vehicles are hurting consumers

Nov 8, 2023 by AFP

By Andrew Gilstrap

Brent Bennett and Jason Isaac of the Texas Public Policy Foundation have brought to light what many Americans have long suspected: the Biden administration’s energy policy, focused on a swift transition to an all-electric vehicle (EV) fleet, is contributing to rising costs for American consumers.

This revelation comes as many Americans are already struggling to make ends meet. Nevertheless, the Biden energy policy and its focus on coercing Americans and American businesses into adopting EVs is only accelerating.

President Biden’s multifaceted energy policy toward energy subsidies for electric vehicles

The effort that President Joe Biden is leading is multifaceted. Many Americans are aware of the state and federal tax credits for new electric vehicle purchases. However, these credits are only a small part of the total benefit that EV owners receive.

The true cost of these subsidies can be divided into three further categories:

  • The added expenses for utility company customers
  • The increased costs for those who still prefer the reliability and affordability of gas-powered vehicles
  • The burden placed on American taxpayers

When the researchers calculated the hidden costs of owning an EV over a 10-year span by comparing it to the gas consumption of a traditional vehicle, the results were stark. Without the current subsidies, the equivalent cost of “fueling” an EV would come to about $17.33 per gallon.

This figure is quite revealing, considering that around $8.44 of this amount comes from federal regulatory credits alone, specifically the Corporate Average Fuel Economy standards and Greenhouse Gas emission standards.

Who is affected by Biden’s energy subsidies for electric vehicles?

These regulations, which are part of the Biden energy policy, are initially levied on vehicle manufacturers but ultimately paid for by those who buy gas-powered vehicles.

On top of this, utility customers are also impacted as they bear the cost of enhancing power generation and distribution networks to support an all-electric fleet, adding approximately $3.58 per gallon equivalent in indirect subsidies that EV owners can pass on to their fellow Americans through higher utility bills.

Plain old American taxpayers aren’t spared either. They are responsible for the $2.72 per gallon in tax credits awarded to EV purchasers, that the federal government and many states have adopted. However, the only direct cost that EV owners must shoulder is the actual charging cost, which is about $2.60 per gallon equivalent.

Americans can expect fewer choices, higher energy costs because of these energy subsidies

Despite these financial implications, many government officials continue to push toward an exclusively EV future, seemingly disregarding the associated costs or whether consumers or the technology are ready for such a shift. This energy policy will lead to fewer choices and higher costs for Americans. To prevent that, we need to eliminate all subsidies that put a finger on the scale of innovation and hinder true technological advancement.

While the number of EVs sold will likely continue to grow, that growth should not be a monument to the government’s ability to pick winners and losers. Nor should it be built on the backs of the vast majority of Americans who prefer gas-powered vehicles.

Instead, EVs should earn their place on the road by competing on a level playing field with their gas-powered rivals. Competing, that is, to build the best car, not over handouts from Washington. Sadly, President Biden’s energy policy sees it differently. But thanks to this new research, car owners and energy consumers can finally see the true cost of Bidenomics.

Read the full report.