Will Proposal 1 help fund EV infrastructure?

Dear Reader,

This month we’re excited about the positive job news on Michigan’s West Coast, but we're also following policy developments that may impact future EV sales. LG Chem in Holland has announced plans to double the size of its production workforce this year, hiring “several hundred people” before the year’s end.

Capitol BuildingThe production ramp up comes after an earlier announcement that Daimler’s Smart ForTwo electric car would be fitted with LG Chem lithium-ion battery cells. The previous Smart ForTwo’s batteries were produced by a Daimler subsidiary, but given LG Chem’s high production capacity at the Holland plant, it offered a less expensive and more efficient option. This is great news for a plant that previously came under some criticism after a delayed start-up due to slower than expected EV sales.  

We’re also excited to hear that in Ann Arbor, Mahindra and Mahindra has announced it will start producing its GenZe 2-wheel electric scooter.

As we head into May, we’ll be watching the Michigan
Ballot proposal 1, which would create a new dis-incentive for EV purchases.  If passed, Proposal 1 will trigger a $75 annual registration surcharge on EVs and a $25 annual surcharge on most hybrids. It may seem negligible, but it’s surprising how such measures could potentially cut into EV sales. Take Georgia for example, where lawmakers recently voted to remove a tax credit to EV owners and add a $200 registration fee.  Auto dealers are now expecting a 70% drop in sales.  Metro Atlanta currently has the highest per-capita rates of EV ownership in the country, but probably not for long. The government is hoping for increased revenue for transportation, but we call this a significant step backward. Is Michigan going in the same direction?

On the other end of the spectrum, lawmakers in Oregon and Minnesota are seeking to enact a rebate for the purchase of a plug-in vehicles, recognizing the value to the state’s economy from reduced gasoline purchases and other economic activity, and the benefit to the state’s environment.  All-electric vehicles would get a $3,000 rebate, and plug-in hybrids would get $1,500.  

While EV owners in general are not opposed to paying their fair share for use of the roads, failing to recognize the economic and environmental benefits of EV’s can lead to an environment that is, well, penalizing.  If Proposal 1 does pass next month (and we all know that the state needs a solution to its transportation funding problems), we hope the legislature can be convinced that some portion of those dollars should be used to support the development of increased EV charging infrastructure.

And if it doesn’t pass?  Well, its back to the drawing board.

In the meantime, check out other good news stories below about EV’s and efforts here in Michigan to encourage their growing use.

Until next time.

Charles Griffith
Climate & Energy Program Director
The Ecology Center