WASHINGTON – The Congressional Budget Office (CBO) released a report titled: “Effects of Federal Tax Credits for the Purchase of Electric Vehicles,” in which it concluded “the lifetime costs to consumers of an electric vehicle are generally higher than that of a conventional vehicle or traditional hybrid vehicle of similar size and performance, even with tax credits, which can be as much as $7,500 per vehicle.”
And, assuming everything else is equal, the larger an electric vehicle’
While electric vehicles aren’t new – General Motors introduced the EV1 for lease in the 1990s –
The CBO report acknowledges, “For electric vehicles to achieve the aims that supporters have for them—such as decreasing gasoline consumption, reducing emissions of greenhouse gases, and strengthening the U.S. automobile industry—consumers must buy those vehicles.”
And, of the two, the CBO states “gasoline prices have more potential to narrow the cost gap,” stating, “With gasoline prices of $6 a gallon, for example, the lifetime costs of many types of electric vehicles would be less than or equal to the costs of conventional vehicles, given the current tax credits … But even if electricity were free, the tax credits would still need to be about twice as high as the current ones, in many cases, before electric vehicles would be cost-competitive.”
CBO’s analysis, while noting gasoline powered vehicles contribute to “35 percent of nation’s carbon dioxide emissions attributed to human activity” came to the following two conclusions about “the effectiveness of the tax credits for electric vehicles in advancing those energy and environmental goals:”
The report asserts there is much uncertainty as to whether tax credits and other federal subsidies will have any lasting effects because the possibility exists electric vehicles may never achieve significant consumer acceptance, and states, “Federal incentives will clearly not have achieved the goal of helping to bring about the widespread use of electric vehicles if those vehicles never attain a significant share of the U.S. automobile market.”
The CBO report also recognizes price isn’
