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The Georgia Legislature Just Pulled the Plug on Electric Cars

Atlanta is the nation's largest market for the Nissan Leaf — but state lawmakers just voted to revoke a generous tax rebate on electric vehicles and replace it with a $200 tax on their purchase.

by Matt Smith
Apr 2 2015, 10:35pm

Photo by Matt Smith

For once, Georgia ranks among the top states in America for something other than poverty, corruption, or miserable traffic.

Don't worry, they're fixing that.

A generous state tax break has helped make Georgia the number two state for electric vehicles, and made Atlanta the top market for the compact Nissan Leaf. Both the Leaf and the higher-end Tesla sedans are now common sights in and around metro Atlanta, where more than 10,500 are registered.

But this year, Georgia lawmakers needed to raise nearly $1 billion to patch up crumbling roads, highways, and bridges. So they are pulling the plug on that $5,000 tax credit — a move budget analysts say will contribute $66 million to the state's coffers in 2016 and nearly $190 million by 2020. 

But it gets worse for electric vehicle (EV) boosters. Legislators are adding a $200-a-year annual fee for owners to offset the loss of gasoline taxes that drivers would otherwise pay to maintain roads.

Critics argued that the tax break amounted to giving free cars to Atlanta yuppies.

Environmentalists say that's going to wreck the state's EV market. Jeff Cohen, founder of the Atlanta Electric Vehicle Development Coalition, told VICE News that sales could fall by more than two-thirds once the tax credit cuts off in July.

"I think you're going to start hearing more people call their House reps and Senators when they start feeling that pain, versus being able to save money because of a tax credit and things of that nature," Cohen said.

At least one Leaf driver, Beth Gilchrist, told VICE News he wasn't likely to get another one when her lease is up in the fall.

"I'll probably get a Mini if there's no tax credit," she said. "I just don't think it would be worth purchasing if it weren't such a really good deal."

An electric vehicle recharges in a parking lot at the Georgia State Capitol. (Photo by Matt Smith)

Cohen and other EV advocates said their cause was undercut by the very generosity of the subsidy, particularly in the lease market. The state credit — coupled with up to $7,500 in federal incentives — means a roughly $30,000 Leaf can be leased for as little as $100 a month — with no need to buy gasoline. So critics argued that the tax break amounted to giving free cars to Atlanta yuppies.

"You heard it from more than one representative, which meant someone was going around saying this is nothing but a free car," Don Francis, executive director of Clean Cities Georgia, told VICE News.

"One of the arguments I've heard in the Capitol was we were giving these tax credit to rich folks and taking it away from farmers in south Georgia," Francis added. "My argument is the people you're hurting are the people who can afford it because of the tax credit, and will now not be able to afford it."

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The transportation bill still has to be signed by Governor Nathan Deal, but he's not expected to veto a badly needed measure over the electric vehicle provision.

Georgia's legislative session wasn't a total loss for the EV market: The state House and Senate approved a bill that will allow Tesla to sell its cars direct to Georgia buyers without going through independent dealerships. That measure was sponsored by the same lawmaker who pushed for the repeal of the electric-car credit, Representative Chuck Martin. 

Martin did not respond to a VICE News request for comment on Thursday, the last day of the legislative session.

Francis said EV backers had thrown their support behind another bill that would have reduced the credit to $2,500, expanded it to cover hybrid vehicles, capped its total cos,t and phased it out after three years. The measure died in committee.

Francis argued that subsidizing electric vehicles actually brings more money into state coffers, since most gasoline comes from other states. The money an electric-vehicle driver doesn't spend on fuel then gets spent around town, where it's subject to state and local taxes, "rather than send it down the pipelines to Louisiana or Texas," he said.

Related: China's horrific air quality prompts its government to purchase electric cars

Meanwhile, Georgia's electric vehicles are keeping about 22,000 tons of greenhouse gas emissions out of the atmosphere each year, according to Anne Blair, clean fuels director of the Southern Alliance for Clean Energy.

Even with Georgia's heavy reliance on coal-fired power plants to generate electricity, electric cars produce fewer emissions, she said.

"Other states like in the Northwest and other areas, driving an EV there with a cleaner electricity grid is much cleaner than driving them here," Blair told VICE News. "But no matter where you are in the US, driving an EV is cleaner than most gasoline vehicles on the road today."

And Francis said supporters would be coming back in 2016, expecting to be armed with hard numbers to show the General Assembly it had made a mistake.

"We're licking our wounds and crawling away," he told VICE News. "But we're going to come back. That's just a given, because we think the legislature has made a very ill-advised move."

Follow Matt Smith on Twitter: @mattsmithatl

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