A state sales tax exemption for electric vehicle purchases in Washington state is set to expire after reaching a threshold set by the legislature in 2016, while the state and a variety of stakeholders are investing in greater infrastructure to support them. The tax credit loss occurs despite efforts by proponents until the session’s final day to get legislation passed that would extend it.
Since 2005, Washington has provided a sales tax credit for electric vehicles. The 2016 bill approved by the legislature has the credit apply up to $32,000 of a vehicle selling price and expires when 7,5000 vehicles have been purchased, a figure reached this spring.
In its final proposed version this session, SB 6080 would have extended the tax credit by raising the vehicle amount to 10,000. It managed to reach the Senate floor but never received a vote. A similar proposal was introduced in the House via HB 2340 by Rep. Cary Condotta (R-12), but it failed clear the House Transportation Committee after a January public hearing.
SB 6080’s sponsor Sen. Guy Palumbo (D-1) on Twitter called it “a big disappointment,” warning that “as we saw in Georgia when they lost their incentive, EV sales will take a big hit this year. Maybe next year.”
A potential drop in electric vehicle sales could make it even harder for the state to reach a target set by Governor Jay Inslee in 2015 to have 50,000 registered electric vehicles by 2020. Right now, there are roughly 25,000. To reach that goal, the number of electric vehicles Electric vehicles are seen as one way to reduce carbon emissions, most of which come from the transportation sector.
However, Washington Policy Center Environmental Director Todd Myers views such policies as part of state spending “on things that have no impact but are cool.”
He told Lens the tax credit “doesn’t actually achieve its goal, which is to encourage people to buy electrical vehicles who wouldn’t otherwise have purchased them. What it’s supposed to be is an incentive, but when you look at who’s buying the car… people who have a lot of disposable income and people who are highly motivated.”
Myers argues a more effective and less costly way to reduce transportation emissions is through car-sharing programs; in 2016, those programs took 9,000 vehicles off Seattle’s roads, according to the city’s transportation department.
Right now, electric vehicles make up approximately .03 percent of the 7.5 million vehicles registered in the state, according to a 2017 Department of Licensing (DOL) report.
Meanwhile, Washington State Department of Transportation (WSDOT) has a goal of its own: to have electric charging stations at least every 70 miles along all major highways. The first of nine new fast-charging (30 minute) stations funded through a public private partnership (PP3) between the state agency and Energy Northwest is set to open in May in Kennewick. The state funding is matched with monies provided through the Electric Vehicle Infrastructure Transportation Alliance (EVITA), a partnership among Energy Northwest, Benton and Franklin public utility districts and the Tri-Cities Development Council.
“We’re expecting to see a lot of chargers in the coming months,” WSDOT Project Development Manager Tonia Buell said. “People don’t buy the vehicle because of the charging, but if they are on the fence and they know there’s charging they’re more likely to purchase electric vehicles.”
The new projects in that region would add to the current 15 fast-charging stations on Interstate 5, US Highway 2 and sections of I-90 already built in 2012 through a prior PP3 with AeroVironment. The $1.6 million project was funded by the U.S. Department of Energy as part of the American Recovery and Reinvestment Act.
WSDOT’s Electric Vehicle Infrastructure Pilot Program was initially set up through the 2015 Connecting Washington transportation package as an infrastructure bank with $1 million to encourage private investments, a move recommended in the Washington State Electric Vehicle Action Plan.
Infrastructure is considered a crucial component to the electric vehicle industry. The ideal ratio of 4-6 hour charging stations is one to every 2.5 electric vehicles; in 2015, the ratio in Washington was lopsided with 11 vehicles for every station. That same year, the state’s Electric Vehicle Action Plan cited “unreliable public electric vehicle charging equipment” among the several barriers to electric vehicle use. Although there are more than 1,100 public charging stations, most of them take 4-6 hours to fully recharge a vehicle, with 10 percent capable of charging 80 percent of the battery in half an hour.
In addition to PP3s, the state is also benefiting from private investments through Volkswagen’s Electrify America Investment Program, which is the result of a national settlement and aims to spend $2 billion over the next decade in four cycles on zero-emission vehicle infrastructure. The first cycle will install charging stations in Seattle and 16 other metro areas in the country. The bi-state proposal would add charging equipment at 160 Washington state worksites and parks.
Buell said: “A lot of different projects are going on, and we work to coordinate so we’re not duplicating…and to maximize the small amount of funding that we have.”