House Hearing Spells out Extent of Proposed Subsidies for Electric Vehicles

Democrats in the House of Representatives really want Americans to ditch their gasoline-powered cars and trucks for electric vehicles (EVs). A May 5 hearing before the House Committee on Energy and Commerce Subcommittee on Energy laid out the lengths they are willing to go to achieve this end. The hearing focused primarily on the transportation provisions in the CLEAN Future Act, the Committee’s 981-page climate bill that also sets out a zero-emissions electricity requirement. Proponents of this bill went big—they know that the new subsidies have to be far grander than the billions already handed out, given that EVs still account for less than 3 percent of new vehicle sales.

The bill’s most extensive EV provisions concern charging infrastructure. They include rebates of up to $100,000 for public EV charging stations, and up to and additional $25,000 when the equipment needs replacing. There are also a number of grant programs for state and local governments to subsidize more EV charging stations and money for companies that manufacture, install, and operate them. The goal, as set out by President Biden in his infrastructure plan, is to have 500,000 EV charging stations by 2030.

As far as who pays for all of this, the bill’s provisions shift the costs away from those who actually own and use EVs and onto to taxpayers in general.

Supporters of the bill frequently repeated the claim that America is losing ground to China, which has spent more in support of its EV industry. This bill, we are told, will help us catch up and ensure that the coming wave of EV-related jobs are American jobs.

Supporters also pointed to the bill’s environmental justice measures, which provide funding for more EV charging stations in low-income neighborhoods—which seem to have more pressing concerns and where few residents have shown interest in owning an EV.

Predictably, several witnesses represented companies in the EV sector that are likely to benefit from the federal largesse in the CLEAN Future Act, along with the United Auto Workers, which supports the bill’s provisions that make many of these giveaways contingent on the use of union labor.

One witness did provide a breath of fresh air from the rent-seekers. Michelle Michot Foss of the Baker Institute for Public Policy at Rice University noted the substantial requirements for mined materials to bring about a wholesale transition from gasoline to electrification. She noted that, paradoxically, many EV supporters “oppose the mining and mineral processing” necessary to bring about the desired transformation. Further, in response to calls for the U.S. to match China’s levels of EV subsidies, she said she’s “not sure going toe to toe with China on this really makes sense,” instead offering up regulatory reforms and permit streamlining of domestic mining and processing as a more rational policy response.

A.J. Siccardi, representing America’s 150,000 gas stations, also warned against provisions that discourage investments in EV charging at this existing network of fuel providers. Specifically, provisions in the bill that allow regulated utilities to build and run their own EV charging stations and spread the costs over the entire rate base—plus a guaranteed rate of return—make it next to impossible for others to compete. This is yet another example of the bill socializing the costs of EVs, only this time to ratepayers rather than taxpayers.

Not every handout for EVs was discussed. Others come within the jurisdiction of different committees, such as proposals to increase the current $7,500 tax credit for EVs proposed in the Ways and Means Committee. Thus, the final package coming from the House will be an amalgam of several committees’ contributions and likely will be even costlier than what was covered at this hearing.