New Buckeye Institute Research Finds Electric Car Subsidies in Arizona Benefit Wealthier Citizens at the Expense of Lower-Income Families

Jun 05, 2019

Columbus, OH – The Economic Research Center at The Buckeye Institute, in partnership with the Arizona Free Enterprise Club, released new research that found, in an effort to encourage the purchase of electric cars, low- and middle-income Arizonans are subsidizing wealthier Arizonans who can afford new and more expensive electric cars.

The report, It Ain’t Easy Being Green: A Cost-Benefit Analysis of Electric Vehicles in Arizona, revealed that while Arizona policymakers may have good intentions in considering additional subsidies for electric car owners, the subsidies lead to bad outcomes for many Arizonans.

FACT SHEET: Electric Vehicle Subsidies: Good Intentions with Bad Outcomes

“After a comprehensive analysis, our research clearly shows that Arizonans are being over taxed to subsidize wealthy owners of electric cars, which disproportionately hurts those who can’t afford to purchase a new electric car,” said Andrew J. Kidd, Ph.D., an economist with the Economic Research Center at The Buckeye Institute and one of the authors of It Ain't Easy Being Green. “Furthermore, if a new proposal by the Arizona Corporation Commission is adopted, Arizonans will pay more on their electric bills to subsidize the building of more electric charging stations.”

The analysis was conducted to provide policymakers in Arizona with an understanding of the costs and benefits of electric car ownership, finding that for every $17 spent in subsidies Arizonans only gain $1 in social benefits such as lower health costs and reduced pollution. Furthermore, a proposal to require utility companies to build charging stations would pass costs along to ratepayers through higher utility rates. The research also revealed that:

  • More than 83 percent of electric car taxpayer subsidies went to households earning more than $100,000, and less than one percent of those subsidies were used by households making less than $50,000;
  • In Arizona, electric car owners pay on average $500 less each year than non-electric car drivers for road maintenance; and
  • Currently, there is a charging station for every 12 electric cars in Arizona—compared to the 249 gas-powered cars per gas pump.

It Ain't Easy Being Green was authored by Andrew J. Kidd, Ph.D.Rea S. Hederman Jr., executive director of the Economic Research Center and vice president of policy at The Buckeye Institute; Tyler Shankel, economic policy analyst at the Economic Research Center; and James Woodward, Ph.D., economic research analyst at the Economic Research Center. The research was conducted using a cost-benefit analysis developed by economists at the Economic Research Center that analyzes the private and social costs and benefits associated with vehicle ownership in Arizona.

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