An effort is under way in the General Assembly to bring back the state tax credit on sales of electric vehicles Georgia lawmakers took away three years ago.
The legislature in 2015 eliminated a 20 percent tax credit on EV sales capped at $5,000 as part of a broader grab for revenue to pay for a transportation funding bill that is generating up to $1 billion a year for road and highway projects.
One of the key arguments for doing away with the credit was the EV industry had matured to the point buyers no longer needed a tax incentive as a convincer.
But registrations of battery-powered electric vehicles in Georgia plummeted nearly 85 percent between 2014, the year before the credit was repealed, and 2016, according to automotive data company IHS/Polk. While incomplete, 2017 numbers show the same decline.
“This industry is still in its infancy,” said Georgia Rep. Allen Peake, R-Macon, who is sponsoring the bill. “It still deserves some incentives.”
Legacy automakers see the writing on the wall and are embracing electric vehicles. By 2022, Daimler will electrify the entire portfolio of Mercedes-Benz, offering customers at least one electrified alternative in all Mercedes model series. The company is planning to offer more than 50 electrified vehicle variants.
Klaus Zellmer, president and CEO of Atlanta-based Porsche Cars North America, told the Buckhead Business Association Jan. 25 that he expects half of all new cars sold by 2023 will be electric.
Infiniti, meanwhile, said all models launched after 2021 will either be all-electric vehicles or rely on Nissan’s new range-extending electric motor-powered technology called ePower, according to AutoWeek.
Peake’s legislation calls for a more modest tax credit on EV sales or leases than the credit abandoned in 2015. The new credit would be reduced to 10 percent and capped at $2,500 and would be limited to one per household in a three-year period. Also, Peake’s proposal would extend the credit only to EVs worth less than $60,000.
Don Francis, coordinator for Clean Cities-Georgia, said excluding high-end EVs would address objections expressed by one legislator that the previous open-ended credit allowed “a rich white guy in north Fulton County buying a Tesla” to get a tax credit.
While Peake’s bill seeks to clamp down on the size of the credit, it would broaden the types of EVs that would qualify beyond just battery-powered electric vehicles to plug-in hybrids including the Chevrolet Volt.
Motorsports entrepreneur Don Panoz, who co-founded a boutique electric vehicle manufacturer last year, is cautiously optimistic the new bill will make it into law as EV technology becomes more efficient and affordable.
Electric vehicles tend to stimulate the local economy, said Panoz, founder of Chateau Elan Winery and Resort in Braselton.
EVs are less expensive to operate, due to gasoline savings and lower maintenance costs. For every 1 percent of petroleum-fueled miles not driven by EVs in Georgia, about $100 million remains in the state each year, Francis noted.
Emission-free EVs, meanwhile, help contain a major negative side effect of a quintessential Atlanta problem — traffic congestion. As Atlanta’s population surges, so does pollution, as vehicles idle in gridlock. The more EVs on the road, the less noxious emissions spewing out of tailpipes.
“Not that I’m a greenie, but there is nothing wrong with cutting down on pollution,” Panoz said.
Peake said he expects an uphill fight to get the bill through the General Assembly. “The legislature is hesitant to provide tax credits to specific industries,” he said. “[But] this is a broader picture. … Zero emission vehicles cost less to operate and reduce dependence on oil. EVs put money back in the pockets of Georgians.”