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Should CA subsidize electric cars to the tune of $3 billion?

A charging plug connects an electric vehicle (EV) to a charging station on August 17, 2017.
A charging plug connects an electric vehicle (EV) to a charging station on August 17, 2017.
Dan Kitwood/Getty Images

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Assembly Bill 1184 says yes, hunkering down on the $449 million already spent on consumer rebates to increase zero-emission vehicle sales over the last seven years.

If approved by the full state Legislature by September 15, the bill will land on the desk of Governor Jerry Brown.

The idea behind the bill, sponsored by Assemblyman Phil Ting (D-San Francisco) is to subsidize electric vehicles so that they’re comparable in price to similarly sized natural gas-powered vehicles. This will help California meet its 2030 greenhouse gas emission reduction goals, which includes the California Air Resources Board’s target number of 4 million electric vehicles on the road by 2030. According to supporters, these subsidies will drive down the market price of electric cars, eventually making them affordable for all.

But opposition argues that these subsidies would only benefit the wealthy and wouldn’t significantly drive down overall costs. Another major point of contention is where the $3 billion will come from. Right now, it will be primarily drawn from California’s cap-and-trade auction revenue, and some lawmakers argue these state funds could be used more effectively for other projects.

The bill also raises larger questions about whether California should be subsidizing electric cars at all. Is the environmental impact significant enough to merit the cost of subsidies? Could those funds find better use? And will subsidies actually encourage people to buy electric vehicles, or do other factors, such as size and charging station range, play an outsized role?


Steve Chadima, senior vice president for External Affairs at Advanced Energy Economy, a business group that co-sponsored AB 1184; he tweets @stevechadima

Adrian Moore, vice president of Policy at the Reason Foundation; he previously served on the California Public Infrastructure Advisory Commission (2010-2012); he tweets @reasonpolicy