Tim Echols: Why Retain the ZEV/LEV Income Tax Credit In Georgia?
Friday, November 21st, 2014
I was in a restaurant the other day when a legislator came up to me and asked an important question that all of us need to be ready to answer. He asked, somewhat hostilely I might add, “what has Georgia received for the almost $15 million invested in electric cars via the tax credit?”
Our response to this question may determine whether Georgia’s $5000 ZEV income tax credit lives or dies.
Probably our first answer needs to be economic, and not just “our” personal economics. Remember, according to the Georgia Department of Economic Development, for every one percent of petroleum-based miles travelled in Georgia that is displaced by electric vehicles, approximately $201 million dollars will remain in the state of Georgia annually. Each pure electric vehicle purchased keeps $2,242 annually in the state of Georgia by fueling with electricity rather than petroleum-based products. This is huge.
The second reason is similar and one that Don Francis of Clean Cities Georgia talks about frequently. The tax credit received comes back after we file our taxes as a refund, and then gets spent. It buys things in Georgia like clothes, appliances and services. That has a multiplier effect.
Third, electric vehicles fit nicely with our electric grid here. Georgia Power has set up a special tariff to encourage people to get electric vehicles and charge them overnight—when power is super cheap and plentiful. According to a study of 1000 of these Georgia electric car owners on the PEV rate plan, they are not only using electricity instead of gas, but they are saving $180 per year to boot. How? They are shifting their usage to the evening and overnight period. This is good because we have extra electric capacity overnight, and these vehicles help us utilize it. Then, during the day, electric vehiclesand equipment are quiet, clean and efficient and offer users the opportunity to save money on fuel and maintenance costs and reduce their environmental impact.
Fourth, with Atlanta out of compliance with the EPA rule, the metro area needs all the help it can get to attain the standard and save everyone the cost of an emission sticker—not to mention their lungs. Remember, gasoline or diesel engines deteriorate over time, leading to higher emissions with the age of the vehicle, whereas electric vehicles will potentially get cleaner over time as the generation of electricity gets cleaner.
Finally, electric cars send a message to young people. As I sat recently with Mayor Reed discussing Atlanta’s success with electric cars, I asked him what he thought was the greatest benefit our region has received from the $15 million invested through state tax credits thus far. He didn’t hesitate. He said it has sent a strong message to millennials about our priorities. This investment, he further explained, makes Atlanta a more livable city where people want to be. He likened it to the Beltline and other quality of life projects that are drawing talented young people back into the city to live and work. As an Atlanta native, I can get excited about that.
Nissan is having great success with the LEAF and Georgia is the 2nd largest market in the U.S. for all EVs. But behind Nissan, BMW, Kia and many other manufacturers are coming with electric cars. Our message to the legislature needs to be to hold off for another year before taking action. Let’s allow the other manufacturers to benefit as Nissan has done. Then, if they decide to eliminate this credit, do it slowly and phase it out over the next decade. Georgia has a great business climate, in part because we don’t make knee-jerk regulations causing uncertainty and confusion in the marketplace. Let’s not change that now.
I urge you to reach out to your legislator—now—before the session starts and communicate the value of the creditto our state and its citizens.