Electric Vehicle Tax Rebates Favor the Wealthy

David Shultz

David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.

Electric vehicle charger plugged into white electric vehicle.
Courtesy of Ivan Radic on Flickr

What do we want? Money!

When do we want it? Now!

That’s the takeaway from a new study in the journal Environmental Research Letters. In a survey of 2,170 Americans, the authors asked respondents to rate how attractive they found different financial incentives for buying a new electric vehicle. Immediate rebates—cash off sticker price, in other words—were consistently and “overwhelmingly” rated as the most attractive way for the government to subsidize purchases.


Currently in The United States, new EV buyers are eligible to receive up to $7,500 back in the form of a tax rebate. This discount is actually a piece of Obama-era legislation from 2009. President Biden attempted to expand the tax credit to $12,500 in the Build Back Better legislation but was stymied by West Virginia’s Joe Manchin, a man who has taken more money the fossil fuel industry than any other Democrat in the Senate

Seven thousand, five hundred dollars is no small sum, but, on average, survey respondents said they’d be willing to accept a lower rebate if they could have it today, to the tune of $1,400. In other words, the average respondent felt that $6,100 today was as good as $7,500 back on their taxes.

In general, the current tax rebates system was viewed more favorably by wealthier respondents—people who could afford to wait for their money and who were going to owe a lot more money when April 15th rolls around. Remember, if you owe less than $7,500 at tax time, a rebate of that size is always wasted, at least in part. “It's a pretty unequitable thing and very much favors the wealthy and people who have higher tax liabilities,” says John Helveston, a researcher at George Washington University, who co-authored the study.

In addition to perhaps contributing to this sort of financial inequality, the current tax rebate system also means the government is overpaying for the effect they’re generating. If $6,100 today is considered on par with $7,500 at tax time to the average EV buyer, the government could’ve saved $2 billion between 2011 and 2019 by giving out less money more immediately. Or—even better—the program could’ve had a significantly larger effect for the same cost.

The argument—and Helveston says he gets this all the time—is that EV manufacturers would simply raise their prices to account for the immediate rebate, effectively nullifying the benefit to consumers. Helveston says it’s certainly possible that the manufacturers and the dealers would capture a bit of the value from an immediate rebate, but he doesn’t think it’s quite so simple. “These cars are more expensive to start with. They're hard to sell,” he says. “If you put this thing on the lot at a higher price, you're not going to sell that car. The consumers just going to say ‘no.’”

Helveston says that the rebate system might actually make EVs more attractive to dealers in the long run. Dealers have historically been lukewarm on EVs because they don’t require oil changes or a lot of other routine maintenance that internal combustion engines need, meaning dealers see reduced long term revenue from the sale. If some of the rebate value winds up going to the dealer and allows them to sell expensive cars a bit more easily, Helveston says it might help accelerate EV adoption even further. “The dealers have just been completely ignored, but they're actually a pretty serious gatekeeper,” he says.

If American politics shows anything, however, it’s that just because a policy makes sense, doesn’t mean it’s easy to enact. A change to the federal EV tax rebate policy would have to come from Congress, and as long as Joe Manchin continues to protect the interests of the fossil fuel industry, this remains unlikely. However, all is not lost! “That doesn't mean you can't make an impact today,” says Helveston. “At the state level, there's a lot more flexibility.”

The Nation Conference of State Legislatures has a nice roundup of the state-by-state EV incentives on offer, which gives an idea of how wildly variable this landscape is. California has 15 different programs in place that offer benefits ranging from financing for installing an EV charger on your property to an $800 rebate for residential customers purchasing an electric vehicle. West Virginia only has one. Kentucky, Kansas and North Dakota have zero. Check out what’s on offer in your state and see if it persuades you to think electric for your next purchase.

🍵☕️Top 6 Coffee Alternatives for Enhanced Productivity

In the fast-paced world of startups and venture capital in Los Angeles, maintaining peak productivity is essential for founders and investors alike. As the hustle intensifies, many are seeking alternatives to traditional coffee that not only provide a sustained energy boost but also support overall health and well-being. The following list highlights some of the top-rated coffee alternatives that can enhance focus and productivity while minimizing the adverse effects of caffeine. These options incorporate adaptogens, superfoods, and gut-friendly ingredients, making them ideal choices for those looking to optimize their performance without the afternoon crash.


Matcha

Image Source: Jade Leaf Matcha

Matcha is a finely ground green tea that offers a moderate amount of caffeine, along with L-theanine, which promotes relaxation without drowsiness. This combination can enhance focus and concentration, making matcha a suitable alternative for those looking to boost productivity without the jitters of coffee.

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Dandelion Root Coffee

Image Source: Amazon

Dandelion root coffee is a caffeine-free alternative that mimics the taste of coffee. It is known for its potential to support liver health and digestion, which can contribute to overall well-being and productivity. The drink can help avoid the acidity and jitters that often accompany regular coffee, making it a gentler option for those sensitive to caffeine.

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Adaptogenic Drinks

Image Source: MUD\WTR Masala Chai

Adaptogenic beverages, which include ingredients like ashwagandha, reishi, and maca, are designed to help the body adapt to stress and promote mental clarity. These drinks can provide a sustained energy boost without the crash, supporting productivity throughout the day. They are often made with superfoods and spices that enhance both physical and mental performance.

Popular Brands: MUD\WTR Masala Chai (35 mg caffeine), Four Sigmatic Think Coffee (150 mg caffeine), ReNude Chagaccino (0 mg caffeine)


Golden Milk (Turmeric Latte)

Image Source: Golde

Golden milk, made from turmeric, ginger, and milk (or a milk alternative), is a caffeine-free option that can improve mood and reduce inflammation. The calming properties of this drink can help maintain focus and clarity, making it a great addition to a productive morning routine.

Popular Brands: Golde Turmeric Latte Blend (0 mg caffeine), Blume Turmeric Blend (0 mg caffeine), Four Sigmatic Golden Latte Mix (0 mg caffeine)



Chicory Root Coffee

Image Source: Teeccino

Chicory root coffee is an excellent alternative that satisfies the desire for a warm beverage without caffeine. It is rich in inulin, a prebiotic fiber that aids in digestion and promotes gut health by supporting beneficial bacteria. Chicory coffee has a nutty, earthy flavor and can help control blood sugar levels, contributing to overall energy and productivity throughout the day.

Popular Brands: Anthony’s Instant Chicory Root (0 mg caffeine), Teeccino Chicory Coffee Alternative (0 mg caffeine)


Yerba Mate

Image Source: Guayaki Yerba Mate

Yerba mate is a traditional South American herbal tea made from the leaves of the Ilex paraguariensis plant. It contains about 40-80 mg of caffeine per serving, which is less than a standard cup of coffee but enough to provide a gentle energy boost. Yerba mate is rich in antioxidants, vitamins, and minerals, and users often report feeling energized without the jitters or crashes associated with coffee. It has a unique, slightly bitter flavor and can be enjoyed in various forms, including loose-leaf tea and pre-brewed options.

Popular Brands: Guayaki Yerba Mate (40-150 mg caffeine)


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LA’s Data Center Supply Crunch

🔦 Spotlight

Happy Friday Los Angeles!

The Los Angeles data center market is experiencing a significant supply crunch, ranking 12th in growth among top markets since 2020 with only 265 megawatts of colocation inventory (data centers where businesses rent space to store their computing hardware and servers). Despite this, demand is surging, driven by AI, cloud, and hyperscaler needs, with AI accounting for 20% of new data center demand nationally. This scarcity is creating a highly competitive environment, with vacancy rates at a record low 3% and asking rents rising 13-37% year-over-year. For Los Angeles, this presents both challenges and opportunities in the big picture. The city's strategic position as a global entertainment hub and its connectivity to international markets through subsea cables make it an attractive location for data centers. However, the limited inventory and rising costs could potentially hinder growth and innovation in the tech sector. To maintain its competitive edge, Los Angeles will need to address these constraints through new developments, such as GI Partners' 16 MW addition at One Wilshire, and by focusing on high-connectivity, high-power capacity submarkets. The city's tech community should prepare for a landscape of increased competition for quality data center space, higher costs, and the need for innovative solutions to meet growing demand, particularly in AI and cloud services. While Los Angeles faces a challenging data center supply crunch, its strategic advantages and ongoing developments offer a promising path forward.


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LA Companies

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    🌐Decentralizing Data & Vacations: Sony's Web3 Leap and Sensible Weather's KOA Partnership

    🔦 Spotlight

    Happy Long Weekend Los Angeles!

    Sony Group is making a significant push into the blockchain and Web3 space, leveraging its Sony Pictures and Sony Music divisions along with a new global incubator. The company has developed the Soneium blockchain through Sony Block Solutions Labs, a joint venture aimed at accelerating Web3 innovation. Sony is launching the "Soneium Minato" public testnet and a developer incubation program called "Soneium Spark" to foster ecosystem growth and adoption. The initiative includes strategic partnerships with Web3 companies such as Astar Network, Circle, and Optimism. Sony aims to create a fan community centered on creators and connect diverse values through Soneium, with the ultimate goal of integrating Web3 services into people's daily lives. While the company acknowledges the challenges faced by Web3, including limited user adoption and the need for mainstream use cases, it remains committed to decentralizing the concentrated power of the current internet landscape.

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    LA Companies

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      ✨ Featured Event ✨

      LA TECH CEO SUMMIT

      LA’s tech leadership is set to reunite after a long break! This two day summit will focus on building strong connections, sharing insights, and fortifying the local tech community.

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