Detroit’s the Motor City. California’s car culture is unsurpassed. But when the electric car industry staged an “innovation motorcade” of electric cars and trucks today, it did so in Washington, D.C.–fittingly, because, without the government, there would simply be no electric car industry.
Indeed, the market for electric cars is so distorted by government subsidies that it’s all be impossible to determine the true cost of an electric car.
Notice that I said cost and not price; there’s a difference, and it’s relevant to any conversation about business and the environment. Coal-powered electricity is cheap but the price doesn’t reflect the costs of burning coal, including lung disease, mining accidents and greenhouse gas emissions. (See Fossil Fuels: A Legacy of Disaster from the Center for American Progress.) Hamburgers are cheap but the true cost of beef includes methane emissions, farm subsidies and, arguably, heart disease. Gasoline-powered cars externalize costs that include smog, carbon emissions and, some would say, a foreign policy that favors stability, i.e., autocracy over democracy in the Middle East.
Markets, needless to say, work better when prices reflect true costs.
So what’s the true cost of an electric car? Hard to say. Sticker prices are high–Chevrolet’s Volt has an MSRP of $40,280, while the Nissan Leaf is priced at $32,780–but buyers get a $7,500 tax credit that reduces the cost. The government even gives tax credits to buyers of the $109,000 Tesla Roadster.
The tax credits are merely the most visible form of federal support. [click to continue…]