Georgia Legislature Retains Status Quo in 2017 General Assembly Session
As the 2017 Georgia General Assembly 40-day legislative session wraps up, electric vehicle drivers continue to be saddled with the highest road use fees in the US ($204.50 in 2017) and future drivers will see no incentives to adopt electric vehicles as measures to advance both a reduction in the fees and add an incentive failed to gain support within the Georgia Legislature.
Futher the bill to simply clarify that commercial and retail businesses could qualify for up to $2,500 state tax credit for charging station installation also failed to advance for the third session in a row . . . a tax credit that is still on the books and can only be claimed by Southern Company’s Georgia Power, which to their credit, was likely used to help finance the 36 community charging islands installed by Georgia Power over the past two years.
So what does this mean for Georgia and EV Drivers?
The State of Georgia has rapidly solidified its reputation for being the most-EV unfriendly state in the US, which is having a significant impact on Electric vehicle purchases which have stalled at 2015 levels. A state fleet of 25,000 plug-ins represents a mix of low priced used Nissan LEAFs and growth from Tesla models off-setting the precipitious decline in new plug-in electric vehicle sales from Chevrolet, BMW, Ford, KIA, and Nissan.
It has been rumored that Volkswagen of America’s Electrify America business unit, which is charged with dispensing up to $4.7 Billion in ‘diesel-gate’ remediation funds, rejected the City of Atlanta’s funding petition due to the State of Georgia demonstrating its ‘anti EV’ stance through repealing the ZEV/LEV income tax credit and imposing the $200.00 annual road use fee. Likely the City of Atlanta lost out on several million dollars worth of EV charging infrastructure due to the decisions of the Georgia General Assembly.
If there is a silver lining, the small but growing number of EV owners in the Georgia General Assembly are ‘feeling the pain’ and have stated their commitment to address the Road Use fee again in the 2018 General Assembly. We support them and wish them “God Speed”.
Here’s why electric car sales are plummeting in Georgia
Reprinted here is the entire story written by AJC staff writer Chris Joyner published on line on January 13th and in newsprint on January 16, 2017. Copyrighted material – Atlanta Journal Constitution.
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.
Sales of specialty license plates for alternative fuel vehicles plunged when the General Assembly removed a $5,000 tax credit for electric cars in 2015, as figures from the Georgia Department of Revenue show.
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.
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With the 2016 Georgia General Assembly session coming to its close, there was no action taken on either Bill introduced to reinstate a graduated EV tax credit or to reduce the $200.00/year AFV road use fee. As the owner/operator of 3 EVs (2014 VOLT, 2015 LEAF and 2015 Tesla) my bill from the State of Georgia for annual registrations is a whopping $768.00! Ouch!
With EV sales continuing to slide precipitously, a glimmer of hope lies in the establishment of an EV study committee by the Georgia State Senate; I hope to participate as both an EV driver and in my role as National Sales Manager for Current Powered by GE EV charging stations. The committee may not ramp up until after the summer, so check back for updates.
Fortunately, the Federal Goverment reinstated its 30% Income Tax Credit with a $30,000 maximum per job site both retroactive to January 1, 2015 and expiring on December 31, 2016. Here’s a handy link to the Alternative Fuels Data Center, THE source for Federal, State and Local incentives information: AFDC Federal EV Charging Infrastructure Tax Credit.
With the arrival of the 2017 Chevrolet VOLT, 2018 Chevrolet BOLT, Nissan LEAF and Tesla Model III (to be unveiled on March 31, 2016) many great new EV options with longer ranges and lower price tags will be available!
The electric vehicle tax credit debate simply will not go away! Last week Georgia General Assembly House of Representatives member, Margaret Kaiser (D-Atlanta) and her Democrat co-sponsors introduced HB 877 GA Gen Assembly HB 877 EV & EVSE Tax Credits which provides the following:
1). Three year program with tax credit level changing at the 18 month mark and an annual $30 Million Tax Credit Cap. Tax Credit would run from July 1, 2017 to December 31, 2019.
2). Tax Credits for EV’s with battery size of 4.0 to 10.0 kWh: $2,000 reducing to $1,000 on January 1, 2018. 10% Income Tax Credit against vehicle purchase price subject to these caps.
3). Tax Credits for EV’s with battery size >10.0 kWh: $3,000 reducing to $2,000 on January 1, 2018. 10% Income Tax Credit against vehicle purchase price subject to these caps.
4). Purchases and Leases are eligable. Ineligability for Georgia residents who were granted a tax credit ($5,000 ZEV tax credit reduced to $0 in 2015) the three prior years (2013-2015).
5). Tax Credit to business enterprises who install EV charging stationsat 10% of the charger cost subject to a $2,500 cap. Defintion of business enterprise is clarified in HB200 which cleared the House in 2015 and is still with the Senate.
This legislation is substantially what was proposed under HB220 in last year’s session with the notable inclusion of the EV charging station and slightly lower caps. Now the Bill needs a Republican co-sponsor and the best candidate is Don Parsons (R-Marietta) who chairs the House Energy Utilities and Technology Committee and is a member of the tax related committees: Appropriations and Ways and Means.
Watch this blog for updates as we did last year! If you live in metro Atlanta and support EVs, email or call your Georgia House Representative this coming week.
Thanks to CleanCitiesGeorgia, and specifically to its Executive Director, Don Francis, we have our first look at EV vehicle registrations (the best measure for sales since these vehicles are actually registered for use in Georgia) in the 60 days following the repeal of the $5,000 Zero Emission Vehicle (ZEV) tax credit on June 30, 2015.
No surprise, registrations have been cut in half, off by -49% to an average of 462 vehicles in July-August versus a January-June average of 915 EVs. When you look at the data broken out by Battery Electric Vehicles (ZEV tax credit eligable) and Plug-in Hybrid Electrics (ZEV/LEV tax credit ineligable) the PHEV’s are off -24% (31/month July-August vs. 41 January-June) while the BEV registrations have fallen by -46% to 431 units vs. 874 January-June.
Some of this is certainly explained by the pre-Tax Credit repeal ‘Gold Rush” sales in April-June which produced sales of 3,469 EVs. And with the tax credit repealed, EV automaker sales, led by Nissan LEAF (-55%) and BMW i3 (-52%) dropped like a rock. Tesla fared slightly better experiencing only a -19% drop in monthly average sales of the 3 year old Model S (57 vs. 70 units).
So is there any good news? YES! Georgia has added another 6,413 EV’s in 2015 bringing cumulative new EV registrations to 22,795 vehicles over the five year period (not accounting for trade ins, lease returns, accidents) or almost a 40% increase in the number of EV’s registered in the State of Georgia.
What can we expect going forward: further fall off in EV registrations in Georgia until the following happens:
1). Lower cost EV’s are introduced – $30-35,000 price with ranges well in excess of 100 miles. Automotive OEM plans call for vehicles like the Chevrolet BOLT, Tesla Model III, and the next generation Nissan LEAF to meet these metrics.
2). Growing numbers of used EVs come back into Georgia. Almost daily I hear of some one who got ‘the deal of a lifetime’ on a 2 or 3 year old Nissan LEAF, Chevrolet VOLT and yes even a Tesla Model S which only adds to the EV fleet on Georgia’s roads. For 2nd owners, used EVs can be a tremendous value, with plenty of warranty left on the car and the battery and generally pretty low mileage and pricing which reflects the Federal rebates they received when new.
3). New Incentives are introduced in Georgia taking the form of a tax credit, point of sale rebate (as Connecticut, Tennessee and Massachusetts are doing) or some other form of incentive. Fortunately, the Federal Tax Credit for EV’s still has a long life ahead since it is based on the number of qualifying EVs produced by the automotive OEMs (200,000 per name plate then phasing down thereafter).
4). The EV Road Tax is reduced or repealed. The current $200.00 EV road tax as has been discussed on this blog before, is unfair and unjust. It will likely be the subject of legislative proposals in the 2nd year of this Georgia General Assembly session or into the next.
As more data becomes available, look for updates to this blog post.
The title song to Vicki Lawrence’s 1973 Hit (followed by a 1981 movie of the same title and covered in1991 by country star Reba McIntyre) says it all today, June 30, 2015 when the ZEV Tax Credit expires after 17 years at midnight tonight. In it’s wake has been the mad rush to buy and lease Nissan LEAF, Tesla Model S and new to Georgia’s KIA Soul EV before the tax credit expires and is replaced by nothing but the $200.00 annual EV Road Use Fee enacted by House Bill 170.
This author, after investing six months fighting to retain the EV tax credit in some, reduced form (see $914 Million Reasons blog post) leased a 2015 Nissan LEAF for his son at Law School in Virginia and purchased a 2015 Tesla Model S60 for his new business Georgia EVentures, LLC which rents out EVs for extended periods. If you can’t fight ’em, join ’em.
When all the dust clears, the elimination of the ZEV tax credit is likely to produce another 10,000 EVs on metro Atlanta roads as residents snapped up EVs in time for the tax credit. That puts Atlanta around 25,000+ EVs on its roads, helping it maintain a Top 5 EV city ranking.
What happens in 2016? There will be renewed effort to pass an EV tax credit, including PHEVs in the 2016 Georgia Assembly. Some in the state even think that Chuck Martin (House R-Alpharetta) may be the sponsor of the Bill. Speaking at the Alternative Fuel Vehicles 5th Annual Road Show (sponsored by Public Service Commissioner and indefatagible EV supporter Tim Echols) in Decatur GA, Elena Parent (Senate D-Decatur) pledged to introduce new EV tax credit legislation in the 2016 Georgia General Assembly. Let’s hope she can find a Senator across the aisle to partner with her. Brandon Beach (Senate R-Alpharetta) and head of the Senate Transportation Committee would be a good choice. I shared the $914 million dollar EV opportunity with him back in mid-March.
And Georgia Power/Southern Company has stepped up to the plate, backing its portfolio of EV charging station rebates with a fleet of 32 Chevrolet VOLTs to get the word out across the State of Georgia about the power of EVs (and their new Residential Solar Power incentives). Georgia Power is constructing over 60 fast charge and level 2 islands across the state to bring infrastructure to EVs beyond metro Atlanta.
Most exciting is the recent passage in the 114th CONGRESS of S. 1581 ‘to foster market development of clean energy fueling facilitities by steering infrastructure installation toward designated Clean Vehicle Corridors“. I’ll be watching to see if the House passes a similar Bill and a new focus on intercity/interstate Alternative Fuel Vehicles infrastructure is supported by the United States CONGRESS.
Stayed tuned and check back here as 2016 will continue to see the growth and expansion of electric vehicles and infrastructure throughout the State of Georgia!
As Governor Nathan Deal signed the Transportation Bill which repeals the ZEV/LEV Tax Credits, Public Service Commissioner Tim Echols shares his thoughts on what to do now in this guest post. Throughout the battle to keep some EV tax incentive, Tim has been a strong and unwavering voice in support of sustaining the growth of EV’s in Georgia. Many thanks Tim! #2016
All good things must come to an end By Tim Echols
It is official. The generous $5000 state tax credit for leasing or purchasing an electric vehicle is expiring June 30th. The Governor has signed the legislation that passed both the Senate and the House at the Capitol, and would-be electric car drivers are scrambling to get their Nissan LEAF, Tesla or other pure electric vehicle before the credit disappears.
Here are some factors you should consider before buying or leasing an electric car.
First, make sure a pure electric car works for your lifestyle. I live in Athens and lease two Nissan LEAFs, and it works great for my wife and daughter who scoot in and around Athens. When they need to go into Atlanta or drive out of state, they use my E85 car. They charge their cars in our garage and it costs about $20 per month on our electric bill.
Second, these cars have their limitations. Since I have been on the Georgia Public Service Commission, I have praised pioneers who bought or leased an essentially experimental car like a Tesla or Nissan LEAF. It is good for our environment and good for our grid. These consumers are choosing to use a “made in America” fuel too—homegrown Georgia electricity. But mark my word, you will experience “range anxiety” from time to time as you try to press the limit of the 100 mile range on the Nissan LEAF. Tesla owners…not so much. They just have to worry about making their giant car payment.
Third, besides costing less to operate, our Nissan LEAFs, both on a 24 month lease, save our family money. Our monthly lease payments are about $270 per month per car. Nissan “bakes” the $7500 federal tax credit into the transaction, and you simple file with the state department of revenue for the state credit. Figured over 24 months, that is $208 per month, leaving us with about $62 per month out of pocket for the car. We installed a garage charger for about $700 including labor, and the car never needs oil, water, transmission fluid…or gas. We feel like that great deal more than compensates for the “range anxiety” we occasionally experience.
Fourth, the local economy may get a boost from this transaction too. When that tax credit comes back to you, many electric car owners use it to pay college tuition for a child, or a bill, or just put it in the bank to offset the payments. According to the Georgia Department of Economic Development, for every one percent of petroleum-based miles traveled in Georgia that is displaced by electric vehicles, approximately $201 million dollars will remain in the state of Georgia annually. Each pure electric vehicle purchased keeps $2,242 annually in the state of Georgia by fueling with electricity rather than petroleum-based products.
Finally, electric cars help our grid. What you don’t hear is that electric car owners are helping Georgia cut electricity usage, which ultimately saves everyone money. How? Many shift their energy usage to the overnight hours due to an incentive from Georgia Power for electric car owners. According to a study of 1,000 Georgia electric car owners, these customers reduced their annual bill by $180 – even though they charged their car and didn’t buy gasoline for the entire year. This “load shifting,” as we call it at the PSC, saves them money and yet uses less “peak load” electricity resulting in cheaper bills for everyone.
Electric cars aren’t for everyone, but they work great for us. If you want to take advantage of the Georgia tax credit, you should act quickly. Meanwhile, feel free to contact me for more information at firstname.lastname@example.org and join me at the Alternative Fueled Vehicle Roadshow coming to a city near you. See more at www.afvroadshow.com and happy motoring.
Commissioner Tim Echols serves on the Georgia Public Service Commission and leases two Nissan LEAFS. He regulates electricity, natural gas and telecom for the state of Georgia.
Editors Note:To qualify for the $5,000 ZEV, Georgia residents must take delivery of the qualifying new vehicle (Nissan LEAF, Tesla Model S or Roadster, KIA Soul EV, VW eGolf, Mitsubishi Mio) by midnight June 30, 2015. The vehicle must be in your possession with a Motor Vehicle Purchase Agreement signifying delivery. Contact your automotive dealer/showroom for more details.
Data recently released from the Department of Natural Resources who oversees the Georgia ZEV and LEV tax credit program shows that tax claims grew a modest $2 million (+14%) on 25% increase in claimants. So what gives? Actual claim/filer went DOWN by -9% because the filing household could not use the entire $5,000 tax credit! So the tax credit actually helped middle income Georgia residents afford to make the transition into an electric vehicle.
The data further shows that claims are not the $50-60 million range State Legislator Chuck Martin (R- Alpharetta) said they were. More ‘fuzzy’ math by Georgia Legislators!
If you live in Georgia, contact Governor Nathan Deal at the link below to voice your support to line item veto the repeal of the ZEV tax credit and the $200.00 annual road user fee.
Here are links to recent articles published by VICE, SaportaReports, Smart Grid News and TransportEvolved concerning the defeat of the EV Tax Credit and adding the $200 EV Road User Fee and Rep Jay Roberts praising the Transportation Bill while remaining silent on the EV tax credit repeal and Road User Fee:
The 2015 Georgia General Assembly 40 day session is over. What happened? What happens now?
As expected both chambers passed HB 170 Transportation Bill which included the repeal of the $5,000 ZEV and $2,500 LEV tax credits effective July 1, 2015 and added the $200/year/EV road use fee while the legislators raised the gasoline tax to fund Georgia’s aging road infrastructure. Don Francis, Executive Director CleanCitiesGeorgia published data showing that a 3,500 lb EVwould pay the same road use fee as a one and half ton SUV getting 9 miles per gallon in gasoline tax. As the Atlanta Business Chronicle reported on March 27, 2015, Rep. Jay Roberts, author of the HB 170 Transportation bill admitted in a committee meeting on March 12th that he made up the EV road use fee!
Hundreds of Constituent phone calls, emails, signed petitions, and in-person meetings with legislators to address the unfair road use fee fell on deaf ears. They needed over $900 million and the EV tax credit and road use fee was easy pickings and the few EV lobbyist could not get legislators to see the unfairness of their legislation. Georgia Legislators simply did not care.
So now the bill goes toGovernor Nathan Deal for signature,which he clearly intends to do. Deal, as reported by the Atlanta Journal Constitution on April 5, 2015, played a decisive role behind all of the legistation that mattered to him; the Transportation Bill being one of them. The AJC reported that Deal’s lobbyists got $45 million worth of tax breaks pushed through in the final hours of the session.
Another winner? Mercedes Benz USA. Deal got MBUSA employees sales tax free leases! The measure was approved at 12:04 AM, past the official closing time of the 2015 legislative session. WOW! a $1.3 million tax break can get pushed through with nary a debate and after the close of the session!
Georgia On My Mind!EV Owners held a Rally at the State Capitol on April 2nd and have vowed to fight the Road Use Fee and pledge to be back with a new Tax Credit for the 2016 Legislative Session.
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