After Georgia ended its tax credit for electric cars, one of the largest such incentives nationwide, overall sales plummeted by 88.9 percent in a single month, according to new data collected by Watchdog.org.
For 15 years, the Peach State offered a $5,000 state tax break on top of the federal government’s $7,500 credit—meaning “drivers in Georgia could lease one of the lower-priced electric cars such as the Nissan Leaf for about $200 a month and end up spending very little money out of their own pocket,” writes reporter Rob Nikolewski.
The story continues:
Sure enough, sales of the Nissan Leaf in Georgia have taken the biggest hit since the tax credit expired, going from more than 1,029 in May and 1,008 June to just 66 in August.
“When you’re having a product that’s selling because it’s subsidized, what’s the push for Nissan to be innovative and make that car less expensive or more valuable to the consumer?” [state representative Chuck] Martin asked. “I always said (the tax credit) was too open-ended, too generous and too targeted.”
The electric-vehicle industry is already lobbying for reinstatement of the tax credit next legislative session, Watchdog.org reports.
Even so, the sales statistics illustrate how tax credits created artificial demand for a green product that couldn’t compete in a genuine free marketplace.