EV Tax Credit ‘Catastrophically Stupid’: Incoming Ohio Sen. Moreno

Will the EV Boom Backfire? New Senator Eyes Strategy Shift

Republican Senator-elect Bernie Moreno, a former luxury car dealer, has set his sights on becoming a force in transportation policy. He aims to steer the industry away from government intervention and let consumers drive the marketplace – literally. In a bold move, he’s targeting the elimination of the up to $7,500 tax credit for electric vehicle purchases, arguing that it distorts the free market.

"At the end of the day, the $7,500 incentive is catastrophically stupid," Moreno stated at the 2024 CNBC CFO Council Summit.

Moreno’s stance triggers controversy, especially within a political climate that has embraced electric vehicles as a key step towards sustainability and reduced dependence on fossil fuels. Some senators, like Michigan’s Elissa Slotkin, support the EV tax credit as a defensive move, shielding the domestic auto industry from the growing competition posed by Chinese manufacturers.

Moreno dismisses such arguments. "If you don’t care what kind of car they drive, then let the markets work," he declared. "We’re going to let the marketplace decide what kind of cars people should drive, and if it’s electric, great."

Moreno believes that reversing tax incentives for electric vehicles wouldn’t hand the technology race to China. Instead, he views it as a reflection of consumer preference. "There’s never been a case in time where consumers have been more clear about what they want and don’t want," he said. "

The euphoria that surrounded EV investment and sales has indeed waned for major automakers. Companies from Ford and General Motors to Mercedes-Benz, Volkswagen, Jaguar Land Rover, and Aston Martin have announced plans to scale back or delay some of their electric vehicle projects.

While EV sales are still expected to grow, the anticipated boom in consumer demand has not materialized. According to Marin Gjaja, chief operating officer for Ford’s EV unit, the surge in 2021 and 2022 proved to be a temporary market spike. "It’s still growing, but not nearly at the rate we thought it might have in ’21, ’22," he told CNBC.

Instead of pushing for an all-electric future, automakers are adjusting their strategies to offer a more diverse range of vehicles, including gas-powered cars, hybrids, and electric options. This shift moves them away from ambitious plans like General Motors CEO Mary Barra’s mandate for an all-electric fleet by 2035.

Moreno’s vision supports this industry shift. "We’re going to let the marketplace work," he affirmed. "We’re going to create an environment for car companies to be able to have a good tax environment, a good regulatory environment, and a good workforce. Let the marketplace work; stop the madness of government intervention in corporations, and the marketplace will take care of it."

Whether Moreno’s approach will gain traction remains to be seen. His stance throws a wrench into the planned transition to electric vehicles and sparks a debate about the role of government in shaping the future of the auto industry.

Could eliminating the EV tax⁢ credit lead to negative consequences for the environment?

‍ ## Will the EV Boom Backfire?

**Host:** Welcome back to the show. Today we’re diving⁢ into the heated debate surrounding electric ‌vehicles. Senator-elect Bernie Moreno, a former car dealer, has made waves with his proposed plan to eliminate the $7,500 tax credit for ​EV purchases. Senator⁢ Moreno, thanks‌ for joining us.

**Senator Moreno:** Thanks for having me.

**Host:** You’ve called the current EV tax credit “catastrophically stupid.” Can⁣ you elaborate on why you feel so strongly about abolishing it?

**Senator Moreno:** My belief‌ is simple: the free market should‌ determine consumer choices, not government handouts. Providing tax credits​ artificially inflates the demand for electric vehicles, creating a distorted market ‍that ⁤doesn’t accurately reflect consumer preferences. [[1](https://www.freep.com/story/money/cars/2024/11/08/senator-bernie-moreno-trump-auto-industry-ev-incentive-cafe-freeze/76108589007/)]

**Host:** But many argue that these incentives are crucial for combating climate change and reducing​ reliance on fossil ‍fuels. Don’t you see⁤ the⁤ environmental benefits of⁢ encouraging EV adoption?

**Senator Moreno:** Of ‌course, environmental concerns are important. However, I⁢ believe innovation will naturally drive the shift towards sustainable transportation. If consumers truly desire electric vehicles, the market will respond accordingly. Government intervention only stifles innovation and creates dependency.

**Host:** Some senators, ⁤like Michigan’s Elissa Slotkin, argue that the tax credit is essential for protecting the domestic auto industry from competition from Chinese manufacturers. What’s your response to that?

**Senator Moreno:** Let the marketplace decide. American automakers already produce some of the best vehicles in the world. I⁢ have confidence in their‍ ability to‌ compete globally ‍without relying on ‍artificial crutches. We should not prop up industries through subsidies.

**Host:** Senator Moreno, thank you for sharing your perspective. This is clearly a complex​ issue with passionate arguments on both sides. As the EV market continues to evolve, it will be interesting to see how this debate unfolds.