Proposed EV Tax Credit Should Boost Jobs and Environment

by Alleyn Harned, Executive Director of Virginia Clean Cities in Harrisonburg 

Decarbonizing our economy, with provisions in the “Build Back Better” plan, is critical to realizing a cleaner, more sustainable future.  Unfortunately, the politics of delay are complicating what is needed for our energy, economic, and environmental security.

This year, we saw how a single company could be responsible for so much oil price volatility, when the Colonial Pipeline shut down under a ransomware attack, resulting in price shocks and gasoline shortages.  Recently we saw again how a slight increase in gasoline prices and profits at the pump rippled through the economy, requiring all levels of government to act globally to increase supply.  Virginia and the mid-Atlantic were especially hard hit, as we have nearly no oil production, with our vehicles heavily dependent on fuel imported from the Gulf of Mexico, a handful of states, or overseas.

However, it does not have to be that way, as we can produce clean transportation fuels, like solar- or wind-generated electricity, locally at a far lower cost.  Electric vehicles represent many recent economic development announcements and can shift us away from the expense and pollution of oil into cleantech jobs. With electric vehicles, we could see a $1/gallon equivalent fuel for commuters and the workforce, offering a boost to everyone’s budget if vehicles were at accessible price points.

Unfortunately, the debates taking place in Washington aren’t moving at the pace needed to make this technology accessible to all people. Congress is weighing a boosted electric vehicle (EV) tax credit as part of the Build Back Better plan to put more EVs on the road. However, instead of wide accessibility, applying to all EVs sold in the U.S., the new credit is on a path to be confusing and maximize the benefit to just a handful of specific vehicles. We need an accessible credit and for Congress to put all workers, all communities, and our environment forward.

The goal of the EV tax credit should be to reduce our environmental footprint by encouraging the production of EVs and giving all consumers affordable choices for their electric cars. EVs have been too expensive to purchase for far too many Virginians and Americans. This could all change with this boost to the vitally important federal tax credit along with state and local programs.

As it’s currently envisioned, the federal tax credit could be harder to communicate with consumers, and it is widely reported that draft funding is accessible to just a few vehicles. We could better motivate sales of EVs and grow investments in new EV companies and technology nationwide with a comprehensive credit.

Virginia studied an EV incentive in 2020 and set a path forward for a state incentive in 2021 that would be accessible for all technologies still paired on a valued and functional federal credit. Businesses, automakers, dealers, and the environmental community have asked for these technologies. These companies, as well as auto dealers who sell their EVs, support nearly 700,000 American jobs. In Virginia, there are over 282 dealers that support over 17,000 jobs, and the buildout of electric vehicle charging is thousands of jobs for electricians. This is livelihood and lives; the Lung Association’s 2020 Road to Clean Air report indicated that Virginia’s transition to EVs would result in a 43% reduction in asthma attacks, with 1,783 reduced attacks avoided annually. Improving air quality is projected to prevent 115 premature Virginia deaths annually by 2050.  Not only is it important in our quest to limit our carbon footprint, but clean fuel vehicles are ethically and economically the right thing to do.

Any confusion or over-complication in the tax credit, limiting technology to a few vehicles threatens to prevent the full potential our domestically assembled electric vehicles can offer to all Americans. But it doesn’t have to be that way.

Virginia and West Virginia produce nearly no oil but have a wide workforce in a range of cleaner energies and electricity. This allows us to lead in this effort to use our own domestically produced, affordable power in vehicles. I hope that Senators Joe Manchin and Shelley Moore Capito will consider the benefits that these technologies can bring to the types of cleaner and domestic energies produced in West Virginia, and that Virginia Senators Mark Warner and Tim Kaine will push Congress to amend the proposed EV tax credit so that it applies to all qualifying, road-ready EVs before the final bill comes up for a vote. This robust tax credit is needed to accelerate EV adoption for all people while protecting good-paying Virginia jobs.