Gov. Gretchen Whitmer has concocted another plan to stimulate sales of new vehicles in the state.
The MI Vehicle Rebate plan – proposed by the governor in a news release Wednesday afternoon – would cost $25 million and expire once the allocated money is spent.
Whitmer’s plan would rebate:
- $2,500 on a new battery electric or hybrid vehicle manufactured in a facility where the workers are represented by an automotive union.
- $2,000 on a new battery electric or hybrid vehicle.
- $1,500 on a new internal combustion vehicle in a facility where the workers are represented by an automotive union.
- $1,000 on all other new internal combustion vehicles.
If stacked with federal incentives for electric vehicles, purchasers of an electric or hybrid vehicle built at a unionized plant could have the sales price reduced by up to $10,000.
“MI Vehicle Rebate will save you money on your new car as you walk out of the dealership with your keys,” said Governor Whitmer. “Michigan’s auto industry is the backbone of our economy, and this year, the hardworking men and women of the UAW and our world-leading automakers negotiated and ratified a record contract. Now, let’s keep making the world’s best cars and trucks while lowering costs for families by thousands of dollars. Together, we will build and lead the future of mobility and electrification.”
Rep. Andrew Fink, R-Adams Township, weighed in on the rebate scheme in an email to The Midwesterner.
“The original idea – incentivizing EV purchases with tax rebates – at least had a clear objective, even if I disagree with it,” Fink said. “This new idea—offering almost the same rebate for non-EV purchases—is just bizarre. Gas vehicles are already drivers’ more preferred and affordable option, and now there’s the added bonus of a rebate. Essentially, it’s just an incentive to buy new cars, regardless of ‘green’ benefits. Seems like an attempt to please both radical environmentalists, whose goal is reduced gasoline use, and unions, whose goal is keeping gas vehicles in production. But this senseless plan doesn’t accomplish either group’s goal.”
The Whitmer administration claims EV drivers save $6,000 to $10,000 over the life of a vehicle, compared to gasoline and diesel cars and trucks. The governor’s news release alleges EVs require half the repairs, cost half as much to maintain, and costs 50% less to refuel.
However, even with taxpayer-funded subsidies, the price of EVs vastly outpaces traditional vehicles with fossil-fuel-powered internal combustion engines.
According to a Yahoo! Finance report published in October: “The average price for a brand-new EV is about [$61,488]. That’s considerably higher than the average four-door sedan, which runs about [$48,681], according to Kelley Blue Book. Tax credits and gas savings can save you money. However, it’s going to take a few years to make up a potential $20,000 difference.”
Using research from the U.S. Department of Energy, the same report notes that it would take 15 years for the “average EV to make up for its higher purchase price.”
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Yahoo! acknowledges EV owners save an average of $300 each year on vehicle maintenance, it also noted EVs cost far more to repair and insure.
The Yahoo! report quotes Lauren Fix, an automotive expert with Car Coach Reports.
“Totaling all factors in, an EV will set you back $71,770,” Fix said. “A gas-powered car? $58,664. You will never make up the initial expense difference over the lifetime of your more expensive electric vehicle. Put another way, a gas-powered car will cost you $600 more a year to drive. But over an average of six years of owning an EV versus a gas car, the EV will set you back $13,000 more.”
The governor will ask the Michigan Legislature to fund the program in her State of the State address next month.