Steve Forbes Echoes Koch Talking Points on Electric Car Tax Credit
The attacks on electric cars reverberating through the conservative echo chamber have found a new voice in Steve Forbes. The two-time Republican presidential candidate and Editor-in-Chief of Forbes Media published an op-ed on Fox News this weekend, one that repeats a number of well-rehearsed but thoroughly debunked claims casting doubt on the environmental benefits of electric cars and their practicality for the mass market.
Like so many commentary and opinion pieces that came before it (including one by Wyoming Republican Senator John Barrasso, also published on Fox News in February) Forbes cherry-picks data points that are long outdated and cites a number of “reports” that have been commissioned by oil industry and Koch-affiliated think tanks, including the Manhattan Institute.
Debunking the Steve Forbes Op-Ed on Electric Cars
The op-ed hinges on an increasingly popular and misleading theme in recent attacks on electric vehicles (EVs), one that is reflected in the title: “Rich people don’t need your money to buy electric cars—Let’s get real about EV tax credits.”
However, while electric car antagonists like Forbes try to portray the EV tax credit as a handout only to wealthy carbuyers, the figures cited tell an outdated and incomplete story and they ignore auto leases entirely, rendering them next to meaningless in an electric car market where more than half of all new cars registered are leased.
This talking point can be traced all the way back to a 2016 full page advertorial published in The HIll by Koch Industries: “Or the tax credits (up to $7,500) the government offers to consumers who purchase hybrid and electric vehicles. Such credits may seem enticing to the general public, but the reality is that 90 percent of the beneficiaries come from the top income bracket.”
Forbes echoes the claim, adding a citation to a paper published by the University of California Berkeley’s Energy Institute at Haas. The problem with that particular paper has nothing to do with the authors or the publisher, but rather that it is outdated and its findings are being misrepresented. Published in October 2015, the authors Severin Borenstein and Lucas W. Davis use data from electric vehicles sales from 2009-2013, when the electric car market was still in its infancy and very few model options were available to buyers. Their data also doesn’t account for leased vehicles, which according to the author’s own disclosure, skews their findings. (See page 12.)
Drivers who lease vehicles don’t claim the federal tax credit, but as Wade Malone explains on Inside EVs, they benefit from a lower monthly payment after the lessor claims the credit and drops the base price for the lease accordingly.
158,614 plug-in vehicles were sold in 2016. What about the other 100,000 or so EVs? They were leased. In this situation, leasing companies claim the $7,500 tax credit. The tax credit is then almost always applied directly or indirectly to reduce monthly lease payments. As a result, lease rates are typically in the same ballpark (or lower) than equivalent ICE [internal combustion engine] vehicle leases.
Forbes also cites a Manhattan Institute “estimate” of the average income of Tesla buyers from 2013. Bear in mind that six years ago, Tesla only had two models for sale (the luxury Roadster and the premium Model S) and its early adopters certainly were wealthy. Since then, Tesla has added multiple new models at lower prices, including most recently the Model 3, which can be found for as low as $35,000 today, which is less than the cost of the average new car sold in the United States.
In effect, the figures Forbes cites are hardly relevant today, in an electric car market that now has plenty of model options available for less than the average new gas-powered car, and at a time which more than half of all new electric cars registered are leased.
As this op-ed will inevitably careen throughout the conservative media echo chamber, it’s worth noting that Forbes serves on the Board of Trustees of the Heritage Foundation, a key cog in the Koch influence machine that has received more than $6 million from Koch family foundations and another $780,000 from Exxon Mobil.
Talking Points Supplied By Oil-Funded Manhattan Institute
As noted earlier, Forbes’s op-ed cites the Manhattan Institute, which has become a popular reference in the recent spate of attacks on electric cars and the EV tax credit.
Formally known as The Manhattan Institute for Policy Research, the conservative think tank receives extensive funding from the oil and gas industry, including more than $1 million from ExxonMobil and more than $3 million from the Koch Family Foundations.
(The Mercer Family Foundation is also a major donor, and Rebekah Mercer, daughter of hedge fund billionaire Robert Mercer, sits on the Manhattan Institute’s board of directors.)
As Maxine Joselow reported on E&E News, the “The Manhattan Institute has been busy churning out a flurry of anti-EV studies in recent years.” Joselow notes how the recent Barrasso opinion piece for Fox News cited a Manhattan Institute report, and how last week George Will “pointed to another Manhattan Institute study claiming that EVs are dirtier than their gasoline-powered counterparts.”
The Manhattan Institute report most frequently cited by plug-in car critics, titled “Short Circuit: The High Cost of Electric Vehicles,” was written by Jonathan Lesser and published in May 2018 as political lobbying and campaigning around the EV tax credit ramped up. In the report, Lesser cherry-picks data, disregards greenhouse gas emissions, and conducts analysis based on discredited assumptions, leading Lesser to conclude that widespread adoption of electric cars would actually increase air pollution and have a negligible impact on the global climate. In the report and a complimentary commentary in Politico, Lesser also criticizes government subsidies and policies that support the deployment of electric vehicles and EV infrastructure, while ignoring the at least $4 billion in subsidies and tax preferences that the oil and gas industry benefit from every year, amounting to hundreds of billions in taxpayer support for oil producers and refiners over the past century.
Lesser, an adjust fellow at the Manhattan Institute, has frequently filed testimony on behalf of fossil fuel interests like Occidental Petroleum and Shell. As David Pomerantz of the Energy and Policy Institute noted, Lesser has a long track record of providing testimony and writing commentaries that dismiss the scientific consensus on climate change and overestimate costs of energy efficiency and renewable energy resources.
The report has been repeatedly rebutted and roundly debunked by many experts in the electric vehicle and energy industry. As Lynn Daniels, manager of the mobility team at the Rocky Mountain Institute, wrote on the RMI blog, many of the findings in Lesser’s report are “demostrably false,” adding:
“Conclusions are reached through misrepresentation and reliance on projections that are known to be consistently inaccurate. The same poor methods are applied to the economics of electric vehicles (EVs) and to questions about the profitability of, and public investment in, EV charging infrastructure.”
Daniels told Joselow of E&E News that, “the way I read it is that he had a particular outcome that he wanted, which is that EVs are bad…And then he went through and picked [data] that are best going to align with that policy outcome.”
Besides Lesser’s report, the Manhattan Institute has frequently published pieces and made public comments that deny the scientific consensus on climate change, including listing global warming as a top ten “environmental myth.”
Meanwhile, in the Manhattan Institute’s archives alongside aggressive attacks on the electric vehicle tax credit and calls for ending renewable energy subsidies, one can find an impassioned argument for the preservation of oil and gas tax breaks.
Photo: Steve Forbes, probably not singing the praises of electric cars, at the Atlas Network’s 2016 FreedomFest at Planet Hollywood in Las Vegas, Nevada (CC BY-SA 2.0) by Gage Skidmore on Flickr.
Source: desmogblog
