{"id":33801,"date":"2022-10-16T00:04:19","date_gmt":"2022-10-16T04:04:19","guid":{"rendered":"https:\/\/autosector.com\/?p=33801"},"modified":"2022-10-16T00:04:19","modified_gmt":"2022-10-16T04:04:19","slug":"ev-investment-tax-consequences","status":"publish","type":"post","link":"http:\/\/autosector.com\/?p=33801","title":{"rendered":"Electric car investment envy spawns a \u2018tax break industrial complex\u2019 – Autoblog"},"content":{"rendered":"

The electric vehicle<\/a> revolution will be subsidized.<\/p>\n

China<\/a> has been at it for more than a decade, incentivizing\u00a0purchases, backing homegrown battery<\/a> makers\u00a0and blocking foreign firms from competing. Europe has followed suit with generous aid both for consumers and companies.<\/p>\n

Now that electrification has taken root globally, and there\u2019s a climate change<\/a> believer in the White House, the U.S. has jumped into the fray in a bigger way than ever before. First, there was the $7 billion tucked into the infrastructure bill last year. Then, hundreds of millions made available by invoking the Defense Production Act. And now, the mother of them all, the Inflation Reduction Act, which extends generous tax credits to buy, build and charge EVs, and localize the battery supply chain to power them.<\/p>\n

All this global competition gets a lot of attention,\u00a0but there\u2019s another subsidy battle raging within America\u2019s shores: a cutthroat fight among states to land EV and battery investments.<\/p>\n

There were lots of headlines following Ford<\/a>\u2019s announcement\u00a0a year ago that it would invest\u00a0$11.4 billion in\u00a0Tennessee and Kentucky to build two new EV hubs, the largest outlay in its history.\u00a0General Motors<\/a> also set a company record with its $6.5\u00a0billion investment in Michigan early this year.<\/p>\n

What often ends up in the finer print of stories\u00a0about these developments \u2014\u00a0if it gets mentioned at all \u2014\u00a0are the tabs that taxpayers\u00a0pick\u00a0up. States rarely disclose the amounts\u00a0in full, instead\u00a0dribbling\u00a0them out over months in bits and pieces, or in response to public information requests. Even then, calculating<\/a> a full package is like putting together a jigsaw puzzle.<\/p>\n

Bloomberg dove into this in depth\u00a0in\u00a0this story\u00a0yesterday<\/a>, which coincided with a\u00a0new report\u00a0from Good Jobs First<\/a>, a vocal critic of corporate incentives. Among the sweeping policy questions the nonprofit researcher raises: Why should states subsidize EVs when consumer demand is clearly taking off?<\/p>\n

Also complicating matters: the notion that electric vehicles may end up being job killers, more so than\u00a0job creators, if you net out all the losses linked to internal combustion drivetrain components that no longer will be needed.<\/p>\n

Good Jobs First does a detailed\u00a0analysis of some of the deals states have cut with car companies and battery manufacturers. Georgia\u2019s\u00a0$1.5 billion incentive package for Rivian<\/a>, for example, prominently\u00a0touts average annual wages of $56,000. One needs to scroll down 130 pages to find that the\u00a0wage floor is $20 an hour, which works out to about\u00a0$36,000\u00a0a year. The state\u2019s economic development agreement also allows Rivian to use \u201cemployee leasing<\/a>\u201d companies\u00a0to count toward\u00a0its job-creation goals.<\/p>\n

In Kansas, the incentive deal for Panasonic\u00a0that Good Jobs First values at $1.27 billion\u00a0includes some favorable clauses for the Japanese battery company. According to the report, Panasonic has to invest capital for five years to win income tax credits, but doesn\u2019t have to guarantee certain levels of employment or wages. If the factory is unprofitable and doesn\u2019t owe any tax, the state is still obligated to pay out money each year, as long as the investments are made.<\/p>\n

People on the left and the right of the U.S. political spectrum say corporate incentives can be wasteful and unnecessary. Even state officials who participate in the \u201ctax-break industrial complex,\u201d as the Good Jobs First report calls this phenomenon, acknowledge that it\u2019s an unsavory game. But the feeling is they have little choice if they want to compete for these new jobs.<\/p>\n","protected":false},"excerpt":{"rendered":"

The electric vehicle revolution will be subsidized. China has been at it for more than a decade, incentivizing\u00a0purchases, backing homegrown battery makers\u00a0and blocking foreign firms from competing. Europe has followed suit with generous aid both for consumers and companies. Now that electrification has taken root globally, and there\u2019s a climate change believer in the White […]<\/p>\n","protected":false},"author":1,"featured_media":8313,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[3],"tags":[],"class_list":["post-33801","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-design-concepts"],"_links":{"self":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts\/33801","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=33801"}],"version-history":[{"count":0,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts\/33801\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/media\/8313"}],"wp:attachment":[{"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=33801"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=33801"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=33801"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}