Electric vehicle sales fizzle after Georgia pulls plug on tax break

Sales of electric vehicles in Georgia have plummeted since lawmakers ended a generous state tax credit, and the legislator behind the move said it proves him right.

“It wasn’t a surprise to me,” said state Rep. Chuck Martin, R-Alpharetta, the key architect of the move to end the $5,000 credit. “Quite frankly, it vindicates that the credit needed to be removed.”

As recently as June, Georgia was considered one of the top states in the country for the burgeoning electric vehicle movement. Hundreds of public charging stations popped up all over metro Atlanta as Nissan Leafs, Teslas and other plug-in cars proliferated.

The surge in EV cars was based largely on the tax credit for the purchase of a zero-emission electric vehicles. But that all changed this year when Martin’s measure to end the tax credit was inserted into a massive transportation funding bill.

The result? Sales of electric vehicles in Georgia fell more than 80 percent from June, the last month the credit was in effect, to August.

The end of the credit will likely hit sales of Leafs the hardest. One of the most affordable electric vehicles, the Leaf retails for around $30,000. A federal tax credit lowers that price to $22,500.

Local Nissan dealers also routinely offered lease specials with monthly payments starting at $199. A motorist who spread his $5,000 state tax credit over the course of a two-year lease — $208.33 per month — could essentially cover the entire cost of the lease.

“Clearly, people were just buying the Nissan Leaf because it was free” with the credits, Martin said. “I’m not totally surprised there would be a drop-off.”

Martin said the credits will cost the state about $50 million this year, based on the number of cars purchased in 2014.

Now, however, consumers have to make a more nuanced decision between a more expensive electric vehicle and one with a gas engine.

Matt George of Atlanta said the state tax credit “was crucial” to his decision to buy a Leaf.

“I would never have tried the car without it,” George said, because the limited range of the battery — up to 100 miles on a full charge — makes the Leaf a risk for some, depending on their daily commute.

Now that he has one, however, George said he realizes all the other benefits that come with an electric car: no oil changes, no buying gas, no spark plugs or tune-ups. So, would he buy another Leaf without the state tax credit?

“No,” George said. “Because even with all the conveniences, the limit on range tips the scales to no.”

Another move by lawmakers makes him even more convinced he’ll eventually go back to a gas engine. Included in that massive transportation bill was a new $200-a-year registration fee for electric car owners. The bill raised the state gasoline tax and, since EVs don’t use gas, lawmakers added the new registration fee to squeeze road-maintenance dollars from owners of zero-emission vehicles.

That “also weighs heavily on my decision to buy in the future,” George said.

Others, however, said they will consider more than the financial bottom line when choosing a car.

“I would consider another electric because I really like my car, I like the way it drives, and I like that I’m not polluting as much,” said Angie Claussen of DeKalb County. “I read the studies on the effects of air pollution on kids, and it’s worth paying a bit more not to contribute to that as much.”

Jim Nolan of Lawrenceville said the lack of a state tax credit won’t keep him from buying an electric car again, but he realizes it’s “going to be really bad for the general public.”

The tax credits were a factor in his decision to buy a Leaf in the first place, Nolan said, but “I was committed to wanting to buy an electric car.”

Nolan despised giving money to oil companies, and the electric vehicle keeps his dollars out of the hands of gasoline providers.

“I’m more at the extreme end,” Nolan said. “But I think on the other hand, I don’t want it to be just for extremists like me. I want everybody to see how good they are, and really, you need a little bit more money to get people in the door.”

Martin, the bill’s sponsor, said he believes automakers will find ways to make their electric vehicles just as attractive an option.

“Nissan will probably do something with marketing incentives and rebates and what people generally do when they don’t sell as well,” Martin said.

He’s right. Several metro Atlanta Nissan dealers in November offered new 2015 Leafs with up to $7,500 off the retail price.

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