Free Enterprise Club and Buckeye Institute Release Cost-Benefit Analysis of Electric Vehicle Subsidies in Arizona

Free Enterprise Club and Buckeye Institute Release Cost-Benefit Analysis of Electric Vehicle Subsidies in Arizona

Phoenix, AZ (June 4th)–Today the Arizona Free Enterprise Club, in collaboration with the Economic Research Center at The Buckeye Institute, released “It Ain’t Easy Being Green: A Cost-Benefit Analysis of Electric Vehicles in Arizona.” The paper is a comprehensive study examining the pros and cons of electric vehicle (EV) subsidies in Arizona and whether these inducements are worth the cost to taxpayers and utility ratepayers.

The analysis was conducted in response to several proposals being considered by policymakers in Arizona to encourage more drivers to purchase EVs, including a current proposal at the Arizona Corporation Commission to require utility companies build EV charging stations, with the cost of these stations being passed along to all ratepayers through higher utility rates.

The study reveals that EVs are already heavily subsidized by taxpayers in Arizona and that creating a new mandate for the construction of charging stations would only exacerbate the status quo, distort the market for EV technology and redistribute wealth to a few affluent EV car owners at the expense of every electricity user in the state.

“After a comprehensive analysis, our research clearly shows that—in an effort to encourage the purchase of more electric cars—Arizonans are being over taxed to subsidize wealthy owners of electric cars, which disproportionately hurts those who can’t afford to purchase a new electric car.  Taxpayers are seeing little return on these subsidies, paying on average more than $6,000 more per electric car on the road than they are realizing in benefits over the course of five years,” said Andrew J. Kidd, Ph.D., an economist with the Economic Research Center at The Buckeye Institute and one of the authors of “It Ain’t Easy Being Green.” “Furthermore, if a new proposal by the Arizona Corporation Commission is adopted, Arizonans will pay more on their electric bills to subsidize the building of more electric charging stations—even though there are currently 12 public chargers for every electric car on the road in Arizona.”

Some of the other key findings in the study include:

  • A Charging Station Mandate would act as a regressive tax on low and middle-income households to benefit more affluent EV drivers.
  • Over 83% of EV tax credit subsidies went to households earning above $100,000. Conversely, less than 1% of those subsidies were accessed by households below $50,000.
  • In Arizona, EV car owners pay on average $500 less each year than non-EV drivers for road maintenance.

“Mandating the construction of EV charging stations, paid for with an increase in utility rates, is both unnecessary and unfair,” said Scot Mussi, President of the Arizona Free Enterprise Club. “Taxpayers are already overpaying based on the benefits provided by Electric Vehicles. Instead of handing out another subsidy to EV drivers, policymakers should explore other options that avoid picking winners and losers among ratepayers.”