America needs Elon Musk to sell electric cars

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My family’s next car will almost certainly be electric — and that’s a problem, not necessarily for our family but for America.

You see, we are your highly educated rank-and-file liberals in the big cities. We have solar panels. For family burger night, we went meatless. Our current car is a hybrid Toyota Prius, which we barely drive. We take our son to school on foot. When we go to the office, we walk. When we go to the supermarket, we walk. When we went to a baseball game last weekend, we took the subway.

In other words: our carbon footprint is undoubtedly lower than that of the average three-person American household.

Which, from a political point of view, is not ideal. The Americans most likely to buy an electric car are those who are already more environmentally conscious than average. But the people America needs most to buy an electric car are those who drive their vehicles on gasoline more than average.

Analysts at Coltura, a non-profit organization working to accelerate the gas transition, calculate that the top 10% of drivers use 32% of the gas, more than the bottom 60% combined. The richest 20% use almost half of the gas.

Coltura calls this 10% “super users”. These are people like my stepfather, who drives a Ford F-150 on his daily 40-mile commute through rural Texas. Because gas mileage is so uneven across car owners, it doesn’t just matter how fast electric vehicles hit the road. “Who comes first is also critical,” writes Kristin Eberhard, director of climate policy at the Niskanen Center (where I am a senior fellow).

So far, polls indicate that Democrats are more likely than Republicans to express interest in buying an electric vehicle, and EV market share is higher in blue states. The problem is that partisanship correlates with geography, with Democrats more likely to live in dense areas with shorter driving distances and lower fuel consumption. The electric vehicle market share in Washington, which is considerably denser and more transit-oriented than any state, is higher than in 49 states. All of these urban electric vehicles displace much less gasoline consumption than an equivalent number of electric cars would in rural or suburban areas.

Some of this is just marketing – it’s Elon Musk coming in.

Intentionally or not, Musk’s recent conservative tilt — like his advocacy of Republican concerns over biased content moderation policies on Twitter — could be a boon for the environment. Selling Teslas (especially the future Cybertruck) to mostly conservative superusers would cut emissions far more than enticing more urban liberals like me to upgrade our hybrids.

At the policy level, argues Eberhard, the current approach to federal subsidies for electric vehicles needs to change.

The existing flat tax credit of $7,500 for the purchase of an electric car encourages people to buy, but does not change the shape of the demand curve. It’s also regressive, because electric car buyers are wealthier than the average American. Coltura is offering something called a $10-per-gallon ‘gas move incentive’, so an F-150 driver who drives 40,000 miles a year at 20 miles per gallon could be eligible for a whopping $20,000 subsidy. if he bought an EV – while on a Sunday – only a Prius driver like me would only be entitled to a pittance.

Since gasoline superusers have roughly the same income distribution as the general population, these subsidies would be far less regressive than the existing EV credit. They would also, almost by definition, be more cost effective in terms of fuel consumption avoided per dollar spent.

In political terms, however, it’s probably a tough sell. Progressives will want to reward people like me who have made responsible environmental choices, not offer a bailout to owners of exurban SUVs. And the Conservatives who would benefit from this reconfigured program don’t care as much as the Liberals about climate change, air pollution or other potential benefits of an electric vehicle subsidy program.

On the other hand, things are changing. Ten years ago, I wouldn’t have predicted that America’s most successful electric car entrepreneur would be a conservative hero and a progressive villain. If a plan to subsidize electric vehicles for super-users comes together, it could create a virtuous political circle by widening the constituency for electrification.

Careful readers will notice, meanwhile, that the underlying logic here is essentially the same as old-fashioned technocratic ideas like raising the gas tax or economy-wide carbon pricing. . Whether it’s a subsidy or a royalty, it’s trying to change behavior in proportion to the actual use of fossil fuels. The conventional wisdom has long been that these ideas are far too toxic politically to be taken up by Congress, and that is almost certainly true. But the technical merits are worth keeping in mind, because as inflation continues, it seems likely that sooner or later Congress will debate the value of austerity.

At that point, virtually all political choices become unpalatable – which means the unpalatable becomes possible. In a world without free lunch budgeting, it’s important to think hard about issues like designing electric vehicle subsidies in the most cost-effective way. At present, any attempt to introduce a carbon tax or increase gasoline taxes would be politically suicidal. But there is no guarantee that this will always be the case. And then the prospect of targeting super-users may have compelling political as well as economic logic.

More from Bloomberg Opinion:

• Electric cars are moving the center of the automotive universe: Conor Sen

• A $1 trillion Tesla almost makes you feel the other auto giants: Chris Bryant

• The electric vehicle supply chain has a dirty secret: Anjani Trivedi

This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.

Matthew Yglesias is a columnist for Bloomberg Opinion and writes the Slow Boring blog and newsletter. Co-founder and former columnist of Vox, he is also the author, more recently, of “One Billion Americans”.

More stories like this are available at bloomberg.com/opinion

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