California Doubles Down on Subsidizing Wealthy Buyers of Electric Cars

Legislators want to spend $3 billion a year paying for electric vehicle purchases.


electric car charging point
Frank Hebbert/Flickr

California Assemblyman Phil Ting believes "electric cars are our future," and he's willing to spend a lot of taxpayer money to make that future happen.

In what he describes as an "aggressive boost" to the "electric car revolution," Ting (D–San Francisco) has proposed the creation of a $3 billion fund to subsidize the purchase of electric vehicles, mostly through tax rebates. The legislation has already passed California's lower house.

California has already spent a bundle on such schemes, which have produced little in the way of electric car adoption while funneling hundreds of millions of dollars to the state's wealthiest residents.

"The state appears to be in the business of subsidizing a billionaire's company and millionaires who want buy these boutique electric cars," says State Sen. Andy Videk (R-Hanford).

Since 2010, California has spent $295 million on rebates to purchasers of electric cars through its Clean Vehicle Rebate Program (CVRP). A 2016 Berkeley study of the program found that the vast majority or rebate recipients were quite wealthy, with 83 percent having incomes over $100,000.

In 2015, officials amended CVRP to keep individuals earning more than $150,000 and couples earning more than $300,000 from using the rebate. But under Ting's $3 billion proposal, those high-income earners would be eligible for subsidies once again—and much more generous subsidies at that.

Unlike the current CVRP program, which provides a fixed rebate of between $1,500 to $5,000 based on the type of vehicle, Ting's bill would make up the entire price difference between an electric vehicle and a car with equivalent features.

Even with the increased largesse, Vidak says few of his poorer constituents in California's Central Valley would benefit from the expanded rebate program.

"They're still not going to be able to afford these cars. Most of the folks in my backyard probably buy a used car. They're not in the new car market," he has said.

Indeed, despite the subsidies, the electric car market isn't exactly taking off. After spending nearly $300 million on rebates to purchasers, and $81 million on electric car infrastructure, the California Energy Commission reports only 300,000 electric vehicles have ever been purchased in the state.

Of these, about half are partially gas-dependent hybrids. Even if every one of those cars is still being used, that would mean only about half of one percent of the 29 million registered vehicles in the state are fully electric. That's a far cry from the 1.5 million zero-emission vehicles that Gov. Jerry Brown wants to see on California's roads by 2025.

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  1. Lots of people with limited funds like to save money by working on their cars. You can easily wrench a gas-powered car back into working order in your driveway. I don’t think you can do that with an electric or hybrid. Which is why electrics will stay with the folks who have the money to send it to the shop.

    1. actually electric cars are easier to work on just don’t touch the dam wires

    2. Electric cars don’t have maintenance like gas cars. The only system that you maintain is brakes, and because of regeneration they last a really long time and are really easy to fix.

      Otherwise there are simply no real wear parts. And those that eventually do are identical to gas cars – suspension.

      In seven years of electric car ownership I have literally had zero maintenance except tires and wiped blades. No coolant no steering fluid no air filter.

  2. Why can’t any company besides Tesla figure out that consumers don’t want to buy an expensive electric vehicle that looks like a cheap toy car? BMW’s electric abomination has to be the worst offender

    1. I saw a Tesla Model S parked next to my car in a parking lot the other day. It is a very beautiful car, I’ll give them that. I could just do with a little lot less cronyism on their part is all.

      1. Many of them are fairly solid. I was actually thinking of getting a Kia electric. The problem is they get about 100 miles a charge. This is fine for day to day, but it I want to take a road trip, which I frequently do, it becomes a big problem. Particulaly because out west we can have greater than 100 mile stretches of nothing that become impassable.

        1. So the only solution I can think of is own two cars, which makes it basically an extreme luxury item.

        2. And that’s why electric cars aren’t going to really catch on until a better power source is available. Even if they get charge time down to 1/2 hour or something, that’s still a really long pit stop compared to filling the tank with gas. And, from what I can gather about current electric cars, range between charges is at best 200 miles.

    2. Consumers don’t want Teslas EITHER unless they get very generous tax subsidies to buy them.

    3. Real car companies have to make profits

  3. This bill has a ‘Musky’ scent.

  4. California Doubles Down on Subsidizing Wealthy Buyers of Electric Cars

    No wonder limousine liberals love California so much. The state government subsidizes their lifestyle at the expense of everyone else.

    1. You can’t expect us to pay the price to save the planet ourselves. Where’s the justice in that?

      1. Something something… shared sacrifice… mumble mumble… social contract…

    2. Have you seen the tax rates in California?

      1. Yes, and they’re high for everyone, not just “the rich.” The limousine liberals likely don’t mind the high taxes on themselves because 1) they’re better able to shoulder the tax burden than the middle classes and 2) on some level I suspect they see the high taxes as “the price to live in a civilized state as opposed to some icky place like, ugh, Texas.” That and deep down they see the taxes as a form of self flagellation for the “sin” of being wealthy. So yes, their lifestyle choices are being subsidized by everyone else. Just like they like it.

  5. Red Barchetta.

  6. Unlike the current CVRP program, which provides a fixed rebate of between $1,500 to $5,000 based on the type of vehicle, Ting’s bill would make up the entire price difference between an electric vehicle and a car with equivalent features.

    Even with the increased largesse, Vidak says few of his poorer constituents in California’s Central Valley would benefit from the expanded rebate program.

    Something tells me Ting and his constituents couldn’t give two shits about the proles in the central valley. Poor people are something they only care about in the abstract.

    1. More everything!
      money is no object as long as we appease man-bear-pig.

      Thus encapsulates the breadth of economic literacy of the average brainwashed American.

      Long ago it became quite obvious how easily the German people were duped and brainwashed into following a madman. Herds.

  7. California also just passed a cap and trade law which estimates gas price increases of up to 75? per gallon on top of the other gas tax just added. Fucking stupid state i live in. If it weren’t for the fact that it took me 34 years to create a business clientele here I’d move

    1. feel for ya. Watching the zombie hordes spew there marching orders daily in that state must be infuriating, and I’ll bet hilarious.

  8. I’m guessing he isn’t going to champion improvements to the electric grid, which is already really old and rickety and a big influx of electric cars is unlikely to make it better.

    1. matters not. Its the thought that counts when you are incinerating other peoples’ money.

  9. Ting’s bill would make up the entire price difference between an electric vehicle and a car with equivalent features.

    WHo determines the “equivalent features”? I love the smell of corruption in the morning … and afternoon … and evening … and in fact 24 hours a day!

  10. No shit, Sherlock! You ever priced out an electric car? You really think the poor can afford that? You think the poor can afford that electric bill?

    Electric cars are toys for the upper middle class.

    1. They’re a signal to their liberal friends that they care about the environment. Also, you get preferential parking in California and HOV lane access, even without the HO.

      1. and HOV lane access, even without the HO

        Remember, selling fast lanes on the internet is evil. Physical roads, totes cool.

        1. (sry, it’s not that the roads are physical that’s the issue, it’s that they’re ostensibly public.)

    2. Um. If you can afford gas for your car, you can afford the electricity for your car. Electric cars have a far lower cost of operation because they are more efficient at converting power into motion without losing energy to heat.

  11. This policy may be unfair and yes, California is a socialist shithole of politics, but this is not a politician “willing to spend a lot of taxpayer money”.

    If it’s true that all of the subsidies are rebates of taxes already paid, then no “taxpayer money” is being spent. It is not even a subsidy. Another bullshit statement from the article is “California has spent $295 million on rebates to purchasers”. No.

    This kind of language is exactly what progressives use to protect their huge-spending ways. Taxing less is never the same as government spending money. I would expect a Reason writer to understand this distinction.

    1. Tax loopholes = remaining freedoms. The tax rebate program should be enlarged and expanded to all cars, not just electric vehicles. New car purchases stimulate the economy and make the air cleaner by getting old beaters off the streets.

    2. Maybe we can call it a tax break for the rich (CB’s basic point) and see how progs argue around that.

  12. So, who’s going to pay for the roads these electric vehicles use, Congressman Ting?

    The poor schmuck in Central Valley?

  13. Actually, this problem goes way back. Pretty much every major advance in science and industry came from wealthy benefactors.
    So, what exactly is the beef of “libertarians” on this?
    Oh, let me help: “libertarians” don’t want to see the kind of rapid advances in science that making all wealthy people contribute have wrought. It is much better to go back to where a small cadre of volunteer oligarchs sponsored change and improvement.

    1. Me! Me! I want to volunteer to be an oligarch!

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