CBO: Electric Cars Will Flop, Despite $7.5 Billion in Subsidies

Despite the federal government pumping $7.5 billion into the electric vehicle industry in the United States through 2019, overall national gasoline consumption is unlikely to be significantly affected, according to a report released by the Congressional Budget Office (CBO).
Developed by the Bush administration in 2007 and initiated by the Obama administration in 2009, the program delivering the influx of cash is intended to help speed the growth of the fuel-efficient vehicle industry. The funds in question are made up largely by consumer tax credits that offer as much as $7,500 to consumers purchasing electric vehicles, followed by $2.4 billion in grants to electric battery manufacturers and $3.1 billion in loans intended to encourage automotive companies to increase production of electric vehicles. Despite the good intentions behind the funds, the CBO report makes it clear that tax credits and other initiatives will not significantly affect the overall fuel-efficiency of cars on American roads.
“The more electric and other high-fuel-economy vehicles that are sold because of the tax credits, the more low-fuel-economy vehicles that automakers can sell and still meet the standards,” says the report, adding that the funds will have “little or no impact on the total gasoline use and greenhouse gas emissions of the nation’s vehicle fleet over the next several years

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