The Policy Greenhouse

Immediate Effects of EV Incentives

There are many different ways that EV consumer incentives manifest their immediate impacts. Because these incentives have been proven to directly increase EV ownership, it makes sense that one immediate impact of EV incentives is a reduction in emissions that ultimately leads to an increase in atmospheric air quality. Other than this immediate improvement in air quality, another impact that EV’s have had on America’s economy comes in the form of the immediate job growth. This growth has been in part due to the growth in demand for EVs, which led to increased funding for EV technologies and increased manufacturing. Both of these things have been driving the increase in jobs available in the EV industry. The increased interest in EVs has also led to a new interest in energy independence from fossil fuels. With the creation and adoption of more and more EVs by the American people, there has been a gradual shift away from the use of fossil fuels which grows larger and larger as more people adopt EVs. With a larger and larger portion of the American market switching to EVs, there will be less dependence on fossil fuels, and so we will be less vulnerable to fossil fuel price changes. In addition to EV adoption beginning this gradual shift away from fossil fuels, EV incentives have also resulted in the automotive industry transforming in a sense. As of late, there have been more and more EV brands and models popping up in addition to Tesla, such as models by Lucid, Polestar, BMW, and Toyota. There have been little negative effects that have come about immediately from these EV incentives, but there are a few worth noting. Firstly, the immediate budgetary impacts of the government spending on the EV incentives are worth noting. Many argue that the funds the government is spending on the EV industry are better placed elsewhere. Some argue that the adoption of EVs is not the best way that the public can fight climate change, and some politicians consider spendages for fighting climate change as a waste of money as a whole. Much of the opposition to EV incentives have that opinion because of the potential negative long term effects of them.

Long Term Effects of EV Incentives

One potential negative long term effect of the implementation of EV consumer incentives is the impact it would have on equity. EV incentives primarily benefit wealthier consumers that can afford to purchase EVs, so there is a concern that the continued use of EV incentives will wind up contributing to the economic disparity in access to clean transportation. This means that from a policy standpoint, lower income communities would not only be getting the short end of the stick when it comes to being eased through the transition to renewable energy and less carbon emissions, but they might wind up being unfairly penalized for emitting more than the wealthy in the far future once renewable energy is used on a large scale. However, there are also positive long-term benefits of the EV incentives (even though they mostly apply to the economy on a macro level, not directly benefiting those left out of the EV incentives as they are applied now).

Sources:

https://www.milkenreview.org/articles/the-not-so-certain-economics-of-electric-vehicles, https://blogs.worldbank.org/transport/getting-electric-vehicle-tax-incentives-right-why-market-power-distortions-matter, https://www.nber.org/digest/jun19/assessing-federal-subsidies-purchases-electric-vehicles, https://www.epi.org/press/the-shift-to-all-electric-vehicles-could-create-over-150000-jobs-by-2030-if-policymakers-make-smart-investments-to-secure-u-s-leadership-in-the-auto-sector/