Steve Forbes Echoes Koch Talking Points on Electric Car Tax Credit

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The attacks on electric cars reverberating through the conservative echo chamber have found a new voice in Steve Forbes. The two-time Republican presidential candidate and Editor-in-Chief of Forbes Mediaย published an op-ed on Fox News this weekend, one that repeats a number of well-rehearsed but thoroughly debunked claims casting doubt on theย environmental benefits of electric cars and their practicality for the massย market.ย 

Like so many commentary and opinion pieces that came before it (including one by Wyoming Republican Senator John Barrasso, also published on Fox News in February) Forbes cherry-picks data points that are long outdated and cites a number of โ€œreportsโ€ that have been commissioned by oil industry and Koch-affiliated think tanks, including the Manhattan Institute.ย 

Debunking the Steve Forbes Op-Ed on Electricย Cars

The op-ed hinges on an increasingly popular and misleading theme in recent attacks on electric vehicles (EVs), one that is reflected in the title: โ€œRich people donโ€™t need your money to buy electric carsโ€”Letโ€™s get real about EV tax credits.โ€

However, while electric car antagonists like Forbes try to portray the EV tax credit as a handout only to wealthy car-buyers, the figures cited tell an outdated and incomplete story, and they ignore auto leases entirely, rendering them next to meaningless in an electric car market where more than half of all new cars registered areย leased.

This talking point can be traced all the way back to a 2016 full page advertorial published in The Hill by Koch Industries: โ€œOr the tax credits (up to $7,500) the government offers to consumers who purchase hybrid and electric vehicles. Such credits may seem enticing to the general public, but the reality is that 90 percent of the beneficiaries come from the top incomeย bracket.โ€

Forbes echoes the claim, adding a citation to a paper published by the University of California Berkeleyโ€™s Energy Institute at Haas. The problem with that particular paper has nothing to do with the authors or the publisher, but rather that it is outdated and its findings are being misrepresented. Published in October 2015, the authors Severin Borenstein and Lucas W. Davis useย data from electric vehicles sales from 2009-2013, when the electric car market was still in its infancy and very few model options were available to buyers. Their dataย also doesnโ€™t account for leased vehicles, which according to the authorโ€™s own disclosure, skews their findings. (See page 12.)

Drivers who lease vehicles donโ€™t claim the federal tax credit, but as Wade Malone explains on Inside EVs, they benefit from a lower monthly payment after the lessor claims the credit and drops the base price for the leaseย accordingly:

โ€œ158,614 plug-in vehicles were sold in 2016. What about the other 100,000 or so EVs? They were leased. In this situation, leasing companies claim the $7,500 tax credit. The tax credit is then almost always applied directly or indirectly to reduce monthly lease payments. As a result, lease rates are typically in the same ballpark (or lower) than equivalent ICE [internal combustion engine] vehicleย leases.โ€

Forbes also cites a Manhattan Institute โ€œestimateโ€ of the average income of Tesla buyers from 2013. Bear in mind that six years ago, Tesla only had two models for sale (the luxury Roadster and the premium Model S) and its early adopters certainly were wealthy. Since then, Tesla has added multiple new models at lower prices, including most recently the Model 3, which can be found for as low as $35,000 today, which is less than the cost of the average new car sold in the Unitedย States.

In effect, the figures Forbes cites are hardly relevant today, in an electric car market that now has plenty of model options available for less than the average new gas-powered car, and at a time when more than half of all new electric cars registered areย leased.

As this op-ed will inevitably careen throughout the conservative media echo chamber, itโ€™s also worth noting that Forbes serves on the Board of Trustees of the Heritage Foundation, a key conservative cog in the Koch influence machine that has received more than $6 million from Koch family foundations and another $780,000 fromย ExxonMobil.

Talking Points Supplied by Oil-Funded Manhattanย Institute

As noted earlier, Forbesโ€™s op-ed cites the Manhattan Institute, which has become a popular reference in the recent spate of attacks on electric cars and the EV tax credit.

Formally known as The Manhattan Institute for Policy Research, the conservative think tank receives extensive funding from the oil and gas industry, including more than $1 million from ExxonMobil and more than $3 million from the Koch family foundations.

(The Mercer Family Foundation is also a major donor, and Rebekah Mercer, daughter of hedge fund billionaire Robert Mercer, sits on the Manhattan Institute’s board ofย directors.)

As Maxine Joselow reportedย on E&E News, โ€œThe Manhattan Institute has been busy churning out a flurry of anti-EV studies in recent years.โ€ Joselow notes how the recent Barrasso opinion piece for Fox News cited a Manhattan Institute report, and how last week George Will โ€œpointed to another Manhattan Institute study claiming that EVs are dirtier than their gasoline-poweredย counterparts.โ€

Theย Manhattan Institute report most frequently cited by plug-in car critics, titled โ€œShort Circuit: The High Cost of Electric Vehicles,โ€ was written by Jonathan Lesser and published in May 2018ย as political lobbying and campaigning around the federal EV tax credit ramped up. In the report, Lesser cherry-picks data, disregardsย greenhouse gas emissions, and conducts analysis based on discredited assumptions, leading Lesser to conclude that widespread adoption of electric cars would actually increase air pollution and have a negligible impact on the globalย climate.

In the report and a complementary commentary in Politico, Lesser also criticizes government subsidies and policies that support the deployment of electric vehicles and EV infrastructure, while ignoring the at least $4 billion in subsidies and tax preferences that the oil and gas industry benefit from every year, amounting to hundreds of billions in taxpayer support for oil producers and refiners over the past century.

Lesser, an adjust fellow at the Manhattan Institute,ย has frequently filed testimony on behalf of fossil fuel interests like Occidental Petroleum and Shell. As David Pomerantz of the Energy and Policy Institute noted, Lesserย has aย long track recordย of providing testimony and writing commentaries that dismiss the scientific consensus on climate changeย and overestimate costs of energy efficiency and renewableย energyย resources.

The report has been repeatedly rebutted and roundly debunked by many experts in the electric vehicle and energy industry. As Lynn Daniels, manager of the mobility team at the Rocky Mountain Institute, wrote on the RMI blog, many of the findings in Lesserโ€™s report are โ€œdemostrably false,โ€ย adding:

โ€œConclusions are reached through misrepresentation and reliance on projections that are known to be consistently inaccurate. The same poor methods are applied to the economics of electric vehicles (EVs) and to questions about the profitability of, and public investment in, EV chargingย infrastructure.โ€

Daniels told Joselow of E&E News that, โ€œthe way I read it is that he had a particular outcome that he wanted, which is that EVs are bad โ€ฆ And then he went through and picked [data] that are best going to align with that policyย outcome.โ€

Besides Lesserโ€™s report, the Manhattan Institute has frequently published pieces and made public comments that deny the scientific consensus on climate change, including listing global warming as a top 10ย โ€œenvironmental myth.โ€

Meanwhile, in the Manhattan Instituteโ€™s archives alongside aggressive attacks on the electric vehicle tax credit and calls for ending renewable energy subsidies, one can find an impassioned argument for the preservation of oil and gas tax breaks.

Photo:ย Steve Forbes at the 2016 FreedomFest at Planet Hollywood in Las Vegas, Nevada. Credit: Gage Skidmore, CC BYSAย 2.0

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Ben Jervey is a Senior Fellow for DeSmog and directs the KochvsClean.com project. He is a freelance writer, editor, and researcher, specializing in climate change and energy systems and policy. Ben is also a Research Fellow at the Institute for Energy and the Environment at Vermont Law School. He was the original Environment Editor for GOOD Magazine, and wrote a longstanding weekly column titled โ€œThe New Ideal: Building the clean energy economy of the 21st Century and avoiding the worst fates of climate change.โ€ He has also contributed regularly to National Geographic News, Grist, and OnEarth Magazine. He has published three booksโ€”on eco-friendly living in New York City, an Energy 101 primer, and, most recently, โ€œThe Electric Battery: Charging Forward to a Low Carbon Future.โ€ He graduated with a BA in Environmental Studies from Middlebury College, and earned a Masterโ€™s in Energy Regulation and Law at Vermont Law School. A bicycle enthusiast, Ben has ridden across the United States and through much ofย Europe.

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