ATLANTA — The state’s economy would suffer from the immediate end to income-tax credits for the purchase of electric vehicles, according to a study released Wednesday, and one legislator is working toward a gradual phase out instead of an immediate cutoff like House leaders propose.
Rep. Ben Harbin, R-Evans, is the author of a bipartisan bill to pare it down and begin a five-year weaning process he said is necessary to allow the market to adjust.
“We want this to be an incentive. We don’t want it to be just a subsidy,” he said.
Industry observers say the current $5,000 credit is the reason Georgia is the fastest-growing market for electric vehicles. They say the increasing number of the cars is prompting employers, retailers and landlords to install charging stations which make the cars even more attractive by extending their driving range.
Harbin’s proposal, House Bill 220, would drop the credit to $3,000 or $2,000, depending on battery capacity, before it sunsets.
The state’s overall economy benefits from the credit, according to a study sponsored by the Washington-based Securing America’s Future Energy. The author of the SAFE analysis, Robert Wescott, estimates that without it, the 16-year drain on the state’s economic production would be $252 million, mainly from drivers paying more to operate gasoline vehicles instead of buying electric ones.
That’s based on the current price of gasoline, said Wescott, former chief economist on the President’s Council of Economic Advisors. If gas prices spike upward, owners of electric cars would have an even bigger advantage compared to the operating costs of conventional automobiles.
“In some ways, it can be thought of as an insurance policy against oil price shocks,” he said.
Harbin’s bill is awaiting a hearing in the House Ways & Means Committee. Meanwhile, the leadership’s plan for transportation funding, HB 170 that includes the immediate end to the credit, has already been the subject of several hearings.
“As we tell our story, hopefully, we’ll get more people to our side,” Harbin said.
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