(December 12, 2016) – What effects might the 2016 elections have on the electric vehicle industry? To explore this topic, we invited Genevieve Cullen, President of the Electric Drive Transportation Association, and Dan Bates, Partner at Thorn Run Partners, to discuss the election results and how they may impact clean car policy at the federal and state levels.
Genevieve Cullen leads the Electric Drive Transportation Association‘s efforts to promote battery, hybrid, plug-in hybrid and fuel cell electric drive technologies and infrastructure. She provided an overview of the general trends in the electric vehicle market, the market’s key federal policy drivers and discussed how the incoming Trump administration may affect clean car policy.
Electric vehicle sales are increasing and are predicted to comprise 35% of global car sales by 2040. Currently, infrastructure availability continues to increase, with growing numbers of public charging stations. The continuing deployment of infrastructure will rely on public and private partnerships.
Genevieve explained that there are three primary drivers which direct electric vehicle policy: tax incentives, research, development and deployment (RD&D), and regulations. All of these policy drivers may be significantly impacted by the new administration, although there is a huge amount of uncertainty – no one is sure what the new administration will do. The president-elect has said nothing about electric vehicles or alternative transportation.
According to Genevieve, the three policy drivers will be worth watching. Currently, there is a federal tax credit up to $7,500 for the purchase of an electric vehicle and a federal credit for alternative fuel infrastructure, which expires at the end of 2016. The EDTA is working hard to extend this infrastructure credit, but it seems unlikely to happen. Establishing additional incentives and extending existing incentives for alternative fuel infrastructure and vehicle purchases will likely be an uphill climb due to the new makeup of Congress.
On the bright side, there is some promise around electric vehicle charging infrastructure deployment. The incoming administration wants to invest $1 trillion in improving America’s transportation infrastructure, although it has not actually defined what it considers infrastructure. If electric vehicle charging stations are included in the administration’s program, that could have a positive outcome. Despite the enthusiasm from Congress and incoming administration about infrastructure investments, there is uncertainty in how to pay for it.
You can view Genevieve’s presentation here:
Dan Bates of Thorn Run Partners, a long-time lobbyist, works with Drive Oregon to advocate for smart, supportive electric vehicle policy in the Oregon State Legislature. He summarized what occurred in the Oregon state elections, highlighting the outcomes of key races and ballot measures, and concluded with his outlook on how the electric vehicle industry may be impacted by the elections.
Post-election, the Oregon Legislature remains predominantly democratic, but neither Democrats or Republicans will be able to easily garner the two-thirds majority needed to pass bills that raise revenue. Tobias Read, a former Oregon Legislator and long-time champion of electric vehicles, was elected State Treasurer.
The greatest challenge to the Oregon Legislature in the upcoming 2017 Legislative Session will be the large budget deficit, which has increased as a result of several 2016 ballot measures. Measure 97, which would have introduced a higher tax on companies that earn over $25 million annually, promised to raise over $3 billion per year in state revenue. This highly debated measure did not pass. While the opportunity at new revenue failed, Oregonians voted for three other measures (96, 98, 99), all of which raised the amount of expenditures required by the Legislature on veterans’ support, school drop-out prevention, and Outdoor School education, respectively. The new measures require an additional $300 million per year to be spent on the programs. Already in a $1.4 billion deficit prior to the November elections, Oregon will now face a $1.7 billion deficit.
What does this mean for the electric vehicle industry and efforts to boost deployment of clean transportation solutions? It means that securing funding for electric vehicles – either in the form of a vehicle purchase incentive or other funding for deployment activities – will be challenging. The Legislature will be weighing the benefits of putting funds toward clean transportation with other key issues such as education, healthcare and senior services when deciding what to fund and what to trim.
Despite the challenges, Dan believes the likelihood of the Legislature approving a transportation package is higher this year than in previous years. There is a good deal of momentum behind the effort to craft a package. This package is a potential avenue for securing an electric vehicle tax incentive, and Drive Oregon and Thorn Run Partners have been advocating for this outcome.
Dan shared one other key observation. He noted that after considerable work on the part of Drive Oregon and partner advocacy organizations, there is a greater awareness among state legislators that electric vehicles are affordable cars that families can benefit from, not just extravagant toys of the wealthy.
Dan concluded that while he believes there has been a definite shift in the attitudes towards electric vehicles in Oregon’s political landscape and the transportation package is an exciting opportunity, these developments do not mean that garnering funding for electric vehicle initiatives will be easy. To secure funding for electric vehicles initiatives, industry advocates will need to be creative and willing to make trade-offs.