You have reached your limit of free articles this month.

Enjoy unlimited access to myAJC.com

Starting at just 99¢ for 8 weeks.

GREAT REASONS TO SUBSCRIBE TODAY!

  • IN-DEPTH REPORTING
  • INTERACTIVE STORYTELLING
  • NEW TOPICS & COVERAGE
  • ePAPER
X

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and bonus content- exclusively for subscribers. Starting at just 99¢ for 8 weeks

X

Welcome to myAJC.com

This subscriber-only site gives you exclusive access to breaking news, in-depth coverage, exclusive interactives and bonus content.

You can read free articles of your choice a month that are only available on myAJC.com.

Here’s why electric car sales are plummeting in Georgia


Here’s a fact maybe not generally appreciated by commuters gazing at Atlanta’s smudgy, smoggy skyline: Georgia has the second most electric vehicles in the nation.

Here’s another fact: Not for long.

Georgia has about 25,000 electric cars on the road, mostly in metro Atlanta and largely funded by what was one of the most generous state tax incentives in the nation — a $5,000 state income tax credit. But state lawmakers, many of them conservatives who are predisposed against consumer tax credits anyway, canceled the credit in 2015 and installed a $200 registration fee instead.

That whipsaw effect pushed new electric vehicle purchases off a cliff. In July 2015, the state registered 1,426 electric vehicles purchased as the tax credit expired. The next month, just 242 were registered — that’s an 83 percent drop and sales have not rebounded.

The impact also can be seen in the decline of specialty license plate sales for alternative fuel vehicles, which are tied to the registration fee. Every all-electric vehicle — as well as some other alternative fuel vehicles — is subject to a $200 fee. Owner of such cars can opt to get the specialty license plate in return, giving them access to Atlanta’s HOV lanes.

However, since the change in state policy, monthly license plate sales are down nearly 60 percent.

For champions of the clean-fuel cars, the statistics are sobering.

“We should be around 40,000 vehicles now,” said Jeff Cohen, founder of the Atlanta Electric Vehicle Development Coalition. “We’re not growing.”

Backers of alternative fuel vehicles like Cohen have complained that lawmakers turned one of the friendliest states to the electric car into one of the least hospitable.

“According to the Georgia Department of Revenue, sales and leases have dropped over 90 percent,” said Public Service Commissioner Tim Echols, a proponent of the tax credit and owner of two electric cars. “The tax credit was key to our growing this market.”

No one disagrees with that, but it made some conservative lawmakers uncomfortable. Sen. Butch Miller, R-Gainesville, served on a special joint study committee created last year to look into alternative fuel vehicles and said the dramatic decline shows the tax credit only propped up an industry that didn’t have wide consumer support.

“Our previous electric car tax credit was too generous, too rich. We have to strike a balance on what is good for the economy, what’s good for the environment and what’s good for the consumer,” said Miller. “It should be market driven, and a free-market approach answers a lot of questions.”

Credit not likely to be revived

Attempts last year to reinstate a version of the tax credit failed, and the joint study committee met three times last year and issued no recommendations. And Miller made it clear the committee was taking a wait-and-see approach to any new measures.

“At this point it’s really fluid because we are still working on trying to develop the right kind of policy that will move us forward,” Miller said. “With energy prices at their current state, it’s difficult for people to justify the investment in alternative energy and that has slowed the pace of our exploration.”

Advocates hoping the state would consider new incentives got little encouragement from the study committee.

“I’m going be as generous as I can,” said Don Francis, director of Clean Cities Georgia, a federally supported initiative. “I was disappointed at how they approached it and what the output was.”

Francis testified at the final meeting of the study committee that the elimination of the tax credit was costing both consumers and the state money as drivers spent more on gasoline and most of those dollars left the state.

Francis said it was pretty clear the committee wasn’t interested in revisiting the tax credit and instead focused on what the state could do to support business uses for alternative fuels while supporting refueling and recharging infrastructure.

There are no disinterested parties here. Miller, for example, is a car dealer and not for Tesla. Cohen is North American sales manager for General Electric’s vehicle charging stations. Car companies like Chevrolet and Nissan, which produce the most popular all-electric cars, are weighing in as well.

Registration fee highest in nation

But there are legitimate policy questions too.

Should the state put a thumb on the scale to entice consumers to buy one type of car over another? Are consumer tax credits bad policy generally? Doesn’t the state have an obligation to address air quality and climate change by encouraging clean energy?

Francis, Cohen and others who want more state support for electric vehicles are retooling and focusing heavily on the annual registration fee. The fee, which this year will be slightly above $200, is meant to offset the gas tax which electric vehicle owners obviously do not pay but go to fund repairs on the roads everybody uses. However, the indexed fee, which this year will be slightly above $200, is the highest in the nation and there appears to be some support for lowering it.

“I think that’s a realistic priority,” Cohen said.

Cohen is bullish on electric cars (he owns three) and believes that sales will slowly rebound on their own, particularly if the lawmakers reduce the penalty to something less punitive.

“I’d rather see the registration fee addressed to maintain our population,” he said. “I’d rather not fight for a tax credit that market data may not prove we need.”

Francis said there may be a way to return a portion of the tax credit’s incentive by giving buyers a break on sales tax at the point of purchase.

“A lot of states are doing sales tax exemptions rather than credits,” he said.

Whatever the outcome, unless policy changes soon, Georgia’s unlikely position as No. 2 on the electric car rankings (way, way, way behind No. 1 California) likely is doomed.

As AJC Watchdog, I’ll be writing about public officials, good governance and the way your tax dollars are spent. Help me out. What needs exposing in your community? Contact me at cjoyner@ajc.com.



Reader Comments ...


Next Up in Georgia Politics

Senator’s play for medical business stirs conflict of interest concerns
Senator’s play for medical business stirs conflict of interest concerns

Ben Watson — doctor, entrepreneur and Georgia senator — knows how to heal, and he knows how to make a buck. He recently used his elected position to propose legislation that could help him do both. It’s in legislative limbo now, but the subject of his proposal is a hotly contested one: relaxing restrictions that prevent private practices...
Robb Pitts plans to run for Fulton County chairman to replace Eaves
Robb Pitts plans to run for Fulton County chairman to replace Eaves

With Fulton County Commission Chairman John Eaves’ announcement last week that he’s running for mayor of Atlanta, the race to replace him at the county’s helm is on. Robb Pitts, a former Fulton commissioner, announced over the weekend that he plans to run for chairman. In an emailed announcement, Pitts said “a lot more must...
Medical marijuana expansion moves ahead in Georgia House
Medical marijuana expansion moves ahead in Georgia House

A broad expansion to Georgia’s medical marijuana law passed a key House panel Monday, moving a step closer to a floor vote ahead of Friday’s deadline for passage. House Bill 65, sponsored by state Rep. Allen Peake, R-Macon, would double the list of illnesses and conditions eligible for treatment with medical marijuana in Georgia to include...
Clayton State of County address set for Thursday
Clayton State of County address set for Thursday

Clayton County will host its annual State of the County address on Thursday at the Georgia International Convention Center in College Park. Commission Chairman Jeff Turner will give an overview of how the county performed last year and what’s ahead for this year. The 11:30 a.m. to 1 p.m. event is the fourth in a series of county addresses hosted...
Hundreds of Trump supporters rally outside Georgia Capitol
Hundreds of Trump supporters rally outside Georgia Capitol

Pushing back against the fervid protests targeting Donald Trump’s administration, supporters of the president launched a wave of counterdemonstrations showing the Republican their support. One of the largest yet was staged Monday outside the Georgia statehouse, where more than 250 people gathered for the “Spirit of America” rally...
More Stories