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Georgia EV sales sputter without tax credit

Marketplace Contributor Jan 20, 2016

Georgia EV sales sputter without tax credit

Marketplace Contributor Jan 20, 2016

About a year ago, Don Francis would have to explain how Atlanta, Ga. could rank second in the nation in electric car use.  

“I would be out there in the field explaining, ‘Why Georgia?’” said Francis, the coordinator of the federal Clean Cities program in the state.

Now, Francis said he must answer a far different question: Why aren’t Georgians buying or leasing electric vehicles any more? “The market dropped like a rock,” said Francis. New registrations of electric vehicles (or EVs) have fallen by about 90 percent since the summer of 2015.

The reason is a change in Georgia state policy. State law provided those who bought or leased an EV a $5,000 tax credit. A Georgian with an EV could divide that credit over a two-year lease and recoup about $200 a month. But in 2015, Georgia state lawmakers ended the tax incentive to find savings that offset a transportation spending bill.

“A lot of these people made the decision to get in these cars not because of the environment. They wanted to get in because of the math,” said Michael Beinenson, an electric car driver who is also president of the EV Club of the South.

Beinenson worries that the end of the generous tax credit will not only keep new people from adopting the electric car, but may push those who leased EV’s from renewing.

“If we don’t have something out there when they release those cars, you can argue that they will go back to gasoline cars,” Beinenson said, adding that the low price of gas only makes that even more of a possibility.

Tim Echols, a member of the state’s Public Service Commission, said while the tax credit had been Georgia law since the late 1990’s, it was only in the last four years that Nissan steered Georgians toward their electric car, the Leaf, by pointing out the state tax incentive.  “The credit jumpstarted the market,” said Echols, a Republican on the commission that oversees energy policy. But he added that the market is “not quite mature.”

State Public Service Commissioner Tim Echols (standing) with members of the Macon Georgia Rotary Club.

Echols said that in the 2016 state legislative session, Georgia lawmakers could see a bill calling for a smaller tax credit that would phase out over time. But he said legislators in rural stretches of the state are unlikely to approve a bill that will only benefit EV drivers in Atlanta and a few other urban areas.

“(Electric car use) has been a hipster, kind of north Atlanta experience in most peoples’ eyes,” said Echols. That’s because electric vehicles have a limited driving range.

The timing for approval of new tax incentives might be better in a few years, said Echols, when manufacturers like Chevy and Tesla promise to develop electric cars that can drive far longer distances on a single charge.

And there is a final policy blow to the once brisk Georgia EV market.

Gas-powered cars contribute to transportation funding in Georgia through a gas tax. This year, lawmakers imposed a $200 road user fee on alternative fuel vehicles, including electric cars.

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