News Story

Electric Cars Subsidized From Cradle to Grave

Vast giveaways for production, batteries, vehicle purchases, charging stations

Michigan taxpayers are paying more than a billion dollars to support the government’s vision of a future with electric vehicles.

Taxpayers are subsidizing every step involved in realizing that future, from manufacturing vehicles and their batteries to paying for infrastructure, including charging stations needed to keep the alternative-energy cars on the road.

The state of Michigan announced May 13 it will install as many as 30 electric vehicle charging stations in state parks this summer. State officials announced in February that they expect to receive $110 million over five years in federal money to pay for electric vehicle charging infrastructure.

The Michigan Economic Development Corporation, which oversees taxpayer subsidies to corporations, said it would give General Motors $824.1 million in incentives to build and convert electric vehicles and batteries at two manufacturing plants.

Gov. Gretchen Whitmer stated in January that she wants to give $2,000 rebates to residents who buy electric vehicles. Whitmer’s plan would also include a $500 rebate for those who install an at-home charging station. There is already a $7,500 federal tax credit for buying an electric vehicle.

The state of Michigan already subsidizes public and private entities that purchase heavy-duty electric vehicles. Through the Fuel Transformation Program, the Michigan Department of Environment, Great Lakes and Energy provides up to $30 million in grants to organizations that replace diesel-fueled vehicles with alternate-fuel, hybrid or all-electric vehicles.

Utilities are also joining in with subsidies for customers who own plug-in electric vehicles. DTE Energy, the Lansing Board of Water & Light and the Holland Board of Public Works offer customers a special time-of-use rate for customers who own an electric vehicle. Those rates offer customers cheaper electricity at low-demand times.

It would be a challenge for the average Michigan family to afford an electric vehicle. According to the U.S. Census Bureau, the median household income in Michigan was $59,234 in the years 2016 to 2020. The 2022 Nissan Leaf is among the least expensive electric vehicles, with a sticker price starting at $27,400. The best-selling electric vehicle in 2021 was the Tesla Model Y, according to Car And Driver magazine. Its sticker price starts at $64,990.

BlastPoint, a data analytics company, said its 2022 research found the median household income of people ready to buy electric vehicles was $95,000. About 25% of those households earned $150,000 or more a year.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.