Pumping the breaks for EVs

Mar 19, 2024

With help from Marcia Brown.

A vehicle is plugged into a Electrify America electric vehicle charger.

New Jersey Gov. Phil Murphy is looking to boost fees and end tax breaks that could significantly increase the cost of new electric vehicles. | Mike Stewart/AP

THE BIG IDEA

MIXED SIGNALS — New Jersey Gov. Phil Murphy, a Democrat who has pushed some of the nation’s most aggressive climate goals, is causing consternation among his traditional environmental allies by looking to raise the cost of new electric vehicles in the state by thousands of dollars.

Murphy wants to impose a new $250 annual fee to fund transportation infrastructure and phase out a sales tax exemption for EVs at a time when New Jersey is following California in planning to require that by 2035 all new cars sold in the state be zero-emission vehicles.

The looming increases are among the many mixed signals being sent right now in the maturing EV market.

Boosters remain sensitive to these changes after years where Democrats sought to subsidize EV buyers with rebates, tax breaks and other perks. But even as carmakers bet big on the transition away from gas-powered vehicles, there are still questions about consumer appetite for EVs and the rollout of charging infrastructure to broaden their appeal.

In New Jersey, the concerns have led to an unusual alliance between climate activists groups including the state chapter of the Sierra Club and the state’s car industry to push back against Murphy’s plans. The coalition also has some support from one of the state’s most powerful lawmakers on climate issues, Senate Environment and Energy Chair Bob Smith.

“To do anything to discourage EVs in the state is a serious policy mistake,” Smith said on Monday – before voting to send a bill that contained an EV fee increase to Murphy’s desk because it increases the gasoline tax to support infrastructure projects.The new fee, starting at $250 a year, is part of a plan to increase money available for the state’s transportation infrastructure trust fund, which is now largely paid for by gas taxes. Since EVs don’t use gas, their drivers are wearing out roads they aren’t ponying up to repair.

The sticker shock is heightened by a quirky New Jersey policy that requires new car buyers to pay four years of registration fees before they drive off the lot. That policy, which predates Murphy, turns the new fee on EVs into a $1,000 hit since it is counted as a registration cost.

On top of that, Murphy wants to phase out a sales tax exemption for EVs. If that happens, the cost of a new EV would jump by several thousand dollars in coming years.

The Murphy administration defends the policies, saying the fee was calculated to make sure EV drivers pay for as much wear and tear as gas car drivers do each year.

The sales tax break, officials argue, is unsustainable as EV sales are expected to increase. The Murphy administration is looking to cushion the blow a bit, by increasing funding for an EV rebate program and being open to changes in how many years of registration fees are paid all at once on new cars.

WASHINGTON WATCH

ALL FOR NOTHING — President Joe Biden is running the country as the U.S. is experiencing a boom in energy production across the board but almost no one is pleased about his “all-of-the-above” approach, our Ben Lefebvre reports.

Crude oil production hit a record last year, natural gas exports are the highest of any country in the world and wind and solar are the country’s fastest growing power sources, all of which is being driven by a number of factors like a drop in renewable energy prices and technological advances in drilling.

And still both sides of the aisle are unhappy. Democrats focused on climate and environmental advocates think the president’s approvals related to fossil-fuel projects are at odds with his pledges to fight climate change, while Republicans dislike the hundreds of billions of dollars the current administration has devoted to green energy incentives.

“There’s this huge shift that I don't think is very well appreciated in the United States itself in terms of the U.S. role in global energy,” said Dan Yergin, a Pulitzer-winning energy historian and vice president of analytics firm S&P Global. “So many other countries just wish they could be in the position of the United States when it comes to energy, being able to do all these things at the same time.”

Ben has the full story.

AROUND THE NATION

REPAIR HEATS UP — Tennessee lawmakers will hear testimony Tuesday on a new bill that would expand options for farmers and ranchers to get their agricultural equipment fixed, one of at least 21 right-to-repair measures that include agricultural under consideration in states across the country, according to Willie Cade, a repair advocate who recently joined the anti-monopoly group Farm Action Fund as a senior policy adviser.

Farmers and ranchers have been at the leading edge of the right-to-repair movement, and their cause has been taken up by sustainability and consumer advocates looking to reduce waste and repair expenses.

Dozens of states have legislative proposals intended to help lower costs for consumers and reduce waste by making it easier to repair things such as dishwashers, wheelchairs and personal electronics. While many of those bills have little hope of passing or have already stalled, advocates say the high number of proposals shows growing urgency among consumers and lawmakers.

“There is growing confidence in the legislation as it has gained momentum,” said Nathan Proctor, senior campaign director for right to repair at U.S. PIRG.

Advocates also have high hopes for an Oregon bill passed by both chambers of the state legislature earlier this month. The bill, which covers phones, computers and personal electronics, is one of the toughest proposals yet, supporters say.

Manufacturers maintain that they support farmers’ and consumers’ ability to repair equipment, home appliances or cellphones. But, asked about the Tennessee bill, Kip Eideberg, senior vice president for government and industry relations at Association of Equipment Manufacturers, said that such proposals “go further than what is safe, environmentally sustainable, and secure.”

Eideberg also warned that the bills could “could compromise the safe operation of equipment, threaten the safe maintenance and repair of equipment, facilitate violation of federal emissions standards, increase the likelihood of a cybersecurity attack on equipment and its connected environment, and leave equipment vulnerable to untrained or unauthorized parties looking to steal or use it for an unintended purpose.”

YOU TELL US

GAME ON — Welcome to the Long Game, where we tell you about the latest on efforts to shape our future. Join us every Tuesday as we keep you in the loop on the world of sustainability.

Team Sustainability is editor Greg Mott and reporters Jordan Wolman and Allison Prang. Reach us all at gmott@politico.com, jwolman@politico.com and aprang@politico.com.

WHAT WE'RE CLICKING

— CNN takes a deep-dive look at the links between state-level anti-ESG policies and a right-wing think tank with ties to conservative billionaires.

— A group of oil and gas giants have initiated a joint effort to monitor methane emissions from emerging nations. The Financial Times has that story.

— You know how we all generally accept the narrative that Covid lockdowns allowed wildlife to thrive? The New York Times says its not quite that simple.

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