President Joe Biden made electric vehicle and alternative energy mandates a centerpiece of his administration.
Tesla founder and CEO Elon Musk has repeatedly stated his company can easily survive without the electric vehicle-related subsidies and tax breaks contained in the Orwellian Inflation Reduction Act of 2022. If so, his company is most likely the only pure-play EV maker in America that can make that claim.
Now, it appears Musk could get the chance to back up his claim. The GOP majority on the House Ways and Means Committee unveiled legislation Monday that would decimate the heavily subsidized electric vehicle industry in the United States. The latest draft of the House Reconciliation bill would eliminate the $7,500 tax credit to buyers of EVs, rendering most models non-competitive with their internal combustion counterparts and potentially upending the sustainability of most U.S. EV makers.
But House Republicans aren’t stopping with subsidies for electric cars. The 45V hydrogen credit is also on the chopping block in the latest draft, along with several other special interest tax credits contained in the IRA.
Other credits to be phased out in the new draft include the so-called Clean Electricity Investment and Production Tax credits. These are technology-neutral credits that subsidize infrastructure and facilities for the production of renewable energy technologies. The Advanced Manufacturing Production Tax Credit, another pot of money available to renewables developers, would also be chopped.
The inclusion of the 45V credit is not really surprising, but the politics surrounding it differs from the others in that 45V is supported by both renewables companies and some oil companies alike. ExxonMobil, for example, has plans to access that credit at its Baytown, Texas, refinery complex, where it plans to power its facilities using “blue” hydrogen made with natural gas and us it to make ammonia used in fertilizers.
But too many of the startups boasting about making “green” hydrogen using wind and solar are mounting business plans they know are not sustainable solely to benefit themselves by milking the government for more and more tax credits and subsidies.
Eliminating the EV credit would likely put an end to any thoughts of EVs ever making up a substantial portion of America’s car fleet, an outcome that no longer raises the level of concerns it would have just a few years ago. The federal government has already wasted billions of subsidy dollars on doomed EV startups, doomed EV business units at integrated automakers, and efforts to distribute charging stations, a large percentage of which don’t seem to work at any given time.
I and other critics enjoy blistering Ford Motor Company for losing well over $10 billion trying to mount its Model e EV business unit since 2021. But we should remember that it is a simple fact that the existence of the IRA credit and other incentives passed into law by the Democrat congressional majorities and signed by former President Joe Biden over the last four years were the driving force behind the decisions made by Ford, GM, and other U.S. integrated automakers to dive whole hog into the federal trough to support what is turning into Biden’s ruinous agenda.
Ford CEO Jim Farley, GM CEO Mary Barra, and their counterparts at the other legacy carmakers richly deserve the criticism they receive for those decisions, since they had to know at the time the federal policies could change on a dime. But it is fair to remember that they were taken in the midst of a global religious uprising related to climate alarmism, along with heavy-handed arm-twisting from Biden and his senior appointees, like Energy Secretary Jennifer Granholm.
Speaking of Granholm, let’s not forget how Biden’s Department of Energy wasted $7.5 billion to build a total of 8 charging stations, most of which no longer function and some of which are located in areas where few EVs are on the road in any event thanks to the Biden administration’s prioritizing DEI factors over practicality in its decision making.
Biden views the rent-seeking looting of the federal Treasury instigated by the IRA as one of his finest moments as president. As the tote board of corporate losses, startup bankruptcies, and laid-off workers mounts, history will tell a different, incredibly disastrous story. There is no time like the present to put an end to some of this madness.
David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
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