Free Market Coalition to Congress: No Electric Vehicle Tax Credit Expansion

WASHINGTON – Today, a coalition of 34 organizations, led by the American Energy Alliance, sent a letter to several members of Congress expressing their unified opposition to any effort to expand the electric vehicle tax credit.

The coalition includes the Texas Public Policy Foundation, FreedomWorks, Heritage Action for America, the Competitive Enterprise Institute and 30 others stating that expanding the tax credit would be fiscally reckless. The coalition believes that electric vehicles, like all other products in the marketplace, should succeed or fail on their merits, without unnecessary government intervention forcing wealth transfer between states. Other points communicated in the letter include:

Subsidies for electric vehicles are unpopular. As shown in recent polling, 67% of voters believe they should not be forced to subsidize electric vehicle purchases. 

Subsidies for electric vehicles overwhelmingly benefit the rich.  A recent study from the Pacific Research Institue found that 79% of electric vehicle tax credits were claimed by households with an adjusted gross income of more than $100,000 a year.

Expanding the electric vehicle tax credit will be a net harm to consumers. A recent study from NERA economists found that extending the tax credit reduces total personal income of all U.S. households by $7 billion in 2020 and $12 billion in 2035.

AEA President Tom Pyle made the following statement:

“Extending the tax loophole for electric vehicles helps rich people, Californians, companies that already don’t pay taxes, and China, which owns many of the resources required to build and operate these vehicles.  The loophole disproportionally transfers money from middle class taxpayers to rich people, mostly from California.  It hurts the working class, people who buy cars, trucks, crossovers, and SUVs, and those American companies not seeking to expand the loophole for their own benefit. We are proud to have over thirty organizations stand with us to tell Congress that a vote to expand the electric vehicle tax loophole is a vote against American families and workers.  It is just that simple.”

Mandy Gunasekara, former Trump EPA Official and Founder of Energy 45 made the following statement: 

“In 2017, 128 electric vehicles were sold in Mississippi, compared to the nearly 95,000 electric vehicles sold in California.  A system that forces hardworking Mississippians to subsidize wealthy Californians ability to drive around in luxury electric vehicles is simply unfair.”