The Federal Government Is Spending Over $15 Billion To Push Electric Vehicles
Despite the wasteful spending, E.V.s remain unpopular with large portions of the country.
Sen. Rand Paul (R–Ky.) has released his annual Festivus Report, highlighting over $1 trillion in wasteful federal government spending.
This year's report includes a $12 million pickleball court in Las Vegas, $10 billion in maintenance and rent for mostly empty federal buildings, and hundreds of thousands of dollars for censoring nonliberal media (including Reason). Unsurprisingly, the federal government also wasted billions of dollars on clean energy and climate change projects.
Paul's Festivus Report identifies a $10,000 grant from the National Endowment for the Arts to "support a cabaret show on ice skates focused on climate change," $3 million from the Department of State to fund "girl-centered climate action" in Brazil, and $20 million for the Department of Agriculture to "advance fertilizer use in Pakistan, Vietnam, Colombia, and Brazil." The largest energy and climate spender was the Department of Energy, which used "$15.5 billion to push Americans toward electric vehicles they don't want," in Paul's words.
The primary mechanism of the federal government's electric vehicle (E.V.) push is the Loan Programs Office (LPO), which finances energy projects that would likely not receive funding from private institutions. Under the Biden administration, the program's lending authority has grown from $17 billion in 2021 to more than $400 billion. Some of the projects that LPO has financed include $2.5 billion for lithium-ion battery production in Rust Belt states, $362 million to improve vehicle wiring for E.V.s and other cars, and up to $2 billion in conditional loans for battery recycling.
With the incoming Trump administration hinting at a potential clawback of these funds and $290 billion of the $400 billion set to expire in FY 2026, the LPO is quickly pushing projects out of the door. Funding for E.V.s in the last two months alone includes a conditional loan of up to $6.57 billion to E.V. manufacturer Rivian (which has already received billions in state financing), $9.63 billion to BlueOval SK (which makes batteries for Ford), and another conditional loan of more than $7 billion to battery cell maker StarPlus. The Department of Energy also awarded EVgo a $1.5 billion loan to build public chargers this month. This is after the federal government spent $7.5 billion to build only eight public charging stations in three years.
Other projects that have recently received LPO funding include $1.45 billion for solar cells and more than $860 million for Puerto Rico's grid. In total, there is more than $56 billion awarded to active projects and nearly $43 billion conditionally committed.
Direct financing is only the tip of the federal government's E.V.-funding iceberg. The Inflation Reduction Act extended tax credits for E.V.s and plug-in hybrids. These credits, coupled with those for clean energy, are expected to add more than $1 trillion to the federal deficit by 2032.
Despite the federal government's fascination, E.V.s still aren't as popular as internal combustion vehicles. For many rural parts of the country, these vehicles, which tend to have less range and fewer available chargers, are simply not practical. Consumer preferences and technological innovation could change this, and in some cases they have; E.V. sales have climbed since 2018. However, needless subsidies won't make E.V.s more attractive to Americans. It's time for the federal government to stop trying to be a car dealer.
