My views are my own... but I can be persuaded by the facts
Byline: Bill Moore
Saturday was my 75th birthday. We "celebrated" with pineapple upside-down cake, dinner with my brothers at Lil' Buro, and a funeral necessitated by the untimely passing of a 66 year-old cousin from heart failure. The funeral brought my younger brother and his wife up from Houston. He's worked in the airline industry for most of his career, including Continental, United, and three regional commuter lines. He accepted my invitation after dinner to help me finish off the pineapple birthday cake: my personal birthday tradition.
As we sat on the deck in the fading light of dusk, the topic turned to one of our favorite subjects: the airline business. I spent nine years at Continental selling tickets, taking lost bag reports, driving jet bridges, making delayed flight announcements, even cleaning planes and gently stacking and retrieving passenger bags from the cargo hold of DC-9s, 737s, even the Concorde once. Meanwhile, my brother had worked stations as small as Chadron, Nebraska to giant Denver. He's spent the last couple decades in IAH in Houston. His operational management responsibilities took him to most of the large airports across the Midwest to the East Coast. Needless to say, he has a lot of insight into the inner workings of the "biz," including musing about the potential of electric airliners. Two recent developments in particular elicited comments from him: Muse Air's decision to buy Pipistrel electric training aircraft and United's decision to place orders for Heart Aerospace's 30-seat electric-hybrid short haul airline (pictured above).
On the Muse Air move to help student pilots more quickly build flying time so they can move into the right seat of the company's commuter jets, he was not particularly enamored with the choice of light single engine, all-electric, two-seat trainer (https://evworld.com/synopsis.php?newsid=3611). Based on comments of a colleague he respects, he doesn't think the lightly-built Alpha Trainer 2 will be up to the rigors of novice pilot training with the occasional hard landing.
"It's basically a glider with an electric motor," he observed.
The Mesa Pilot Development program is certainly innovative and he credits one of the senior managers at Mesa with whom he is acquainted for clearly identifying a way to deal with the serious pilot shortage problem. But whether or not the Pipistrel is up to the challenge is yet to be seen. In principal, its a promising approach. Mesa figures it can rent the plane to its pilot trainees for $25 a hour: a fraction of the cost of a piston engine trainer where AV gas fuel currently runs from $4.50 to $12.75 a gallon. The US national average is $6.76. A Cessna 172 - a tried and true pilot trainer - rents for $120-$150 a hour, but it's a tough old bird that minted many, many pilots over the decades, including yours truly.
One the subject of Heart Aerospace's "electric-hybrid," he as more sanguine, especially for the 30-seat model. He thought the 19-seat model wouldn't be economically viable. In the case of the 30-seater, however, that configuration offers a better chance of being profitable over short-haul routes, especially since the introduction of "turbo generators" to supplement the plane's batteries, would offer acceptable reserve range capabilities to reach alternate landing fields in the event of bad weather at the original destination. Over the course of his four decade career, he's worked with everything with Swearing Metroliners to jumbo jets, but most recently - like the last couple decades - regional commuter jets, both turbine and turbo prop, so I feel fairly comfortable, he knows he sh*t.
Time will tell if the pretty illustrations live up to the reality of the real world, rough 'n tumble airline business and the often razor sharp expectations of air travelers.
First Published: 2022-09-25
Byline: Bill Moore
The criticisms of the Inflation Reduction Act electric car tax credit policy are wide and loud, largely because it applies to so few electric cars...and that seems to be the point. My initial response to the revised policy to grant up to $7,500 in federal tax credit to buyers of new electric cars ($4,000 for used models) was disappointment. Most of the EVs available to US buyers currently don't qualify. Their manufacturers have reached the 200,000 models sold threshold or they are just too dang expensive: cars max out at $55K while pickup's sticker price limit is $80K. The price cap on "used" EVs is $25K.
[NOTE: The 200,000 EV caps goes away January 1, 2023].
In addition to the price limitations, there's also an income limit, as well. If you make more than $150,000 annually ($300K for couples filing joint returns), you won't qualify for the credits.
There also are requirements on how and where EV batteries and their minerals and subassemblies are sourced. Going forward, the minerals that go into batteries must come from US sources or friendly trading partners: China need not apply. Until 2029, 50% of the materials have to come from "North America" - presumably meaning also Canada and Mexico. Coincidentally, there are large nickel deposits in Cuba and Guatemala.
The strategic goal here is two-fold: reinvigorate America's "green energy" technology economy and secure the nation's vital resources, opening up new mines as well as manufacturing capacity on everything from microchips to battery cathode material to electric cars. However, as Simon Michaux, PhD, with Geological Survey Finland soberly points out there just isn't enough of the necessary minerals and metals to transition to a 100% renewable EV world.
In a nutshell, he argues that swapping one-for-one the current oil-powered transportation system for an electric one appears to be an insurmountable challenge. Basically, we are going to have to rethink our priorities, which is why there has been criticisms leveled at the newly passed law that provides no incentives like those in France to trade in their cars for electric bicycles.
People for Bikes issued the following statement on the eve of the passage of the Inflation Reduction Act: "the climate- and energy-focused Inflation Reduction Act of 2022 misses a massive opportunity by neglecting to invest in an electric bicycle tax credit and other critical initiatives to promote biking for transportation. This omission leaves us sorely disappointed in the future of climate policy given the significant transportation investments in the bill are squarely focused on electric vehicles."
I encourage you to read a couple of articles I posted to EVWorld.com: How Sustainable Are Electric Cars and If the World Biked Like the Dutch, CO2 Emissions From Cars Would Drop by 20% .
To be honest, when I decided to write this blog, I intended to extoll the wisdom of the bill (now law), sensing that its aim was to help America recapture its leadership in EVs, batteries and related technologies and to provide a framework to allow more people to switch from ICE to EV by encouraging carmakers and battery suppliers to focus not on high-powered, luxury EVs, but on affordable, practical models like the LEAF and the Bolt, both around the $30K price or less with the tax credit. I am starting to think that this may be too short-sighted, which is usually how politics works.
Of course, we can't expect construction workers or American farmers to switch from pickups to bikes, but maybe if those of us who call suburbia home drove less and rode more, following the Dutch lead, we wouldn't need to create an EV world of more cars and trucks, but one of more bikes and buses (assuming we eventually find our way out of the Covid malaise).
Or we could just look to Musk to mine mineral-rich astroids, right?
First Published: 2022-08-24
Byline: Bill Moore
Since Congress (narrowly) passed the Inflation Reduction Act and President Biden signed it into law, I have been curating a host of articles trying to account for the changes in the federal EV tax credit part of the bill: who it impacts from consumers to OEMs to suppliers and investors. A keyword search on EVWorld's new RSStream database, which now hosts more than 10,000 story links since its inception this Spring, records 159 stories under the keywords 'tax credit'.
What is obvious is that the new rules (which the IRS and other federal departments have to refine, likely before the end of the year) are not only confusing, but also pretty damned limiting. There's a cap on the price of what a qualifying EV can cost. There's a cap on the income of the buyers, which is intended to help the middle class rather than the wealthier members of American society. The latter, it's assumed, likely can afford an EV without the tax credit if they so desired (and a lot do apparently because Tesla CEO Elon Musk admits 'demand isn't the problem, production is').
Moving into 2023 and thereafter, where the EV and its battery components are manufactured will also determine whether it qualifies for the $7,500 tax credit scheme. And just to be clear, buyers won't get $7,500 if they don't owe that much or more in federal taxes. It's my understanding, it only offsets that amount of taxes you actually owe when you buy the car' or when you signed a binding purchase agreement backed by a non-refundable deposit. Rivian and other startup OEM's quickly implemented this policy get around the new law as it is currently written because their EVs won't qualify for the credit going forward, mainly due to the fact their sticker prices are over the federal cap.
This brings up the question why the Cadillac Lyric is on the list: it's announced base price is some $6,100 over the $55,000 cap for cars; $80,000 for pickups' I'll let GM and the IRS figure that one out.
When you review what cars that now qualify for the credit, most are expensive plug-in hybrids from foreign manufacturers like Audi and Volvo. By 2023, even those won't qualify. According to the Alliance for Automotive Innovation, of the 70 or so electric vehicles currently available in the US market, only about 30% can actually meet federal guidelines. And because carmakers like Tesla and GM have already met the original 200,000 model production threshold, none of their EVs qualify for the credit, though apparently after January 1, 2023, the clock, so to speak, gets reset. I am not entirely clear whether that means an additional 200K cars or some other milestone like a sunset date in the future.
All this raises a concern in my mind, one that other's share, Will the Inflational Reduction Act actually help or hinder the transition to electric vehicles? Did Senator Manchin pull a slick one on the Democratic Party or are its leaders in Congress and in the Oval Office playing the long game? I am starting to think it's the latter and in Part II I'll explain why.
In the meantime, here are five of the most recent reports trying to make sense of who and what qualifies for the tax credit as it's currently understood:
First Published: 2022-08-18
Byline: Bill Moore
I once had a dream! I wanted to start an electric car subscription service. I called it S*Electric!
A long-time acquaintance of mine, who shall be unnamed, encouraged me several years ago to take a look at the electric car subscription model. Intrigued and hoping to build off of EVWorld's "creds" I put together an elementary business plan and modeled several revenue projections. I even had an Oxford-trained (or was it Cambridge?) economist review them.
Neither she nor I could make the numbers work based on what I considered plausible monthly subscription pricing and several hypothesized utilization rates: how many weeks or months a car might be parked and not out with an active subscriber generating revenue. Sure, we might be able to get the numbers work if we doubled the average $300 or so a month for something like a Fiat 500e or Nissan Leaf or BMW i3 (all acquired as "used," off-lease cars out of California, which is where I bought my 500e for $10K in 2019).
I shelved the idea and decided to wait and see how the EV market developed, after all, I don't reside on either coast and the conservative Midwest typically seems to be some years behind the coasts in the adoption of crazy ideas like a month-by-month subscription to an electric car.
Then along came COVID and computer chip shortages and supply line stenosis, skyrocketing energy prices, and an increasing cavalcade of climate disasters prompting a long overdue shift in public attitude towards the reality and consequences of global warming. Seemingly overnight, interest in electric vehicles exploded! Largely unprepared OEMs are struggling to deliver cars with customers waiting months to be handed the key fob. Used EV prices are following a similar trajectory: some owners electing to "flip" their car for more than they originally paid for them.
I and the local Sierra Club chapter wanted to hold a Ride 'n Drive event with the Omaha Storm Chasers - our local AAA baseball team - this coming September as part of the national Drive Electric Week. We invited local new car dealers to participate: none responded. Why? They had no EVs to spare!
This, in all likelihood, is why a new California startup called Autonomy recently revealed they had placed orders for 23,000 EVs from some 17 different manufacturers [see links below]. The orders are worth more than a billion dollars!
Curious how they plan to make this work, I found this comment from Autonomy's chief analyst, Jesse Toprak:
"The required minimum subscription time is three months. After that a customer can return the vehicle at any time with a 30-day notice or continue the subscription on a monthly basis..
"For a Tesla Model 3, the subscription costs can vary, but Toprak said for $4,900 down, which is not refundable, a person can drive a Model 3 for $490 a month. Or a person could put $990 down and have a payment of $900 a month. It can be paid in full each month on a credit card or from a bank account."
Okay?. That's how they think they can get it to work. I got push back when I proposed $250 a month for the Fiat 500e and $300 for the Nissan Leaf. I seem to recall the BWM i3 was $350 a month. So, I will be keenly interested to see how they manage this. Maybe now that EVs are ?in'' and scarce as proverbial "hens teeth" people will be willing to pay this amount.
I recently thought to revive the idea, but this time as an all-electric version of Turo, the carshare app. The key obstacle with this, however, is the question of collision and liability insurance. My insurance company (State Farm) will cover my "loaning" my car to another driver, say a neighbor. It won't cover me or the car if I "rent" it to a third party. So, the idea (and the website) sits there, largely inert waiting for someone else like an Autonomy with seriously deep pockets to take the idea and run with it.
First Published: 2022-08-13
Byline: Bill Moore
There appears to be the mis-presumption abroad that if you buy an electric car, you don't buy gasoline and therefore don't pay state and federal excise taxes on the gasoline you're not burning, and therefore you're not paying your fair share of maintaining the roads on which you drive.
Maybe in some states that might be true...or now. However, it's not where I live in Nebraska. When I bought my fresh-off-its-California lease 2016 Fiat 500e (23K miles) in 2019 and shipped from there to here, the tax folks at the DVM promptly added an extra $75 fee on top of the usual license and property taxes. The fee is something called an "Alternative Vehicle" tax to help cover the money I wouldn't be spending on gasoline at the pump and therefore paying my share into the road maintenance fund. Due to COVID and working from home, I have put only 10,000 miles on the car, yet paid $300 in Alternative Vehicle taxes, besides the state's property tax on motor vehicles.
Doing the math, that means I have paid 7X in road taxes than I would have if I drove a car that burned gasoline and got 25 miles per gallon (2500 miles per yr / 25 miles per gallon = 100 gallons X $0.431 federal + state excise tax = $43.10). So, yes Virginia, I am paying my fair share and then some. Which brings me to this confusing melange of illogic from the conservative (or is it libertarian?) Spectator [https://spectator.org/withholding-tax-pay-by-mile/] by Erik Peters. I am not sure if he's being sarcastic or serious.
The article is entitled, "The Next Big Government Scheme: Taxing You for Every Mile You Drive." It's a headline you'd expect from the "Big Government is Bad" crowd. What confuses me is the Onion-like subtitle: "It's an underhanded way to decrease your carbon footprint." Huh?
He starts off with "One of the biggest economic incentives to drive a hybrid (or a full-boogie electric car) is not having to buy gas and - by dint of that - not having to pay the extortionate tax applied to the purchase of gas. These total around 50 cents in taxes applied to every gallon of gas. Proportionately, gas taxes are just about the most regressive taxes after those applied to cigarettes, with the difference being that no one has to smoke while almost everyone has to drive."
Extortionate? $43 versus $300: that's extortionate, in my book. Well, not really.
He continues, "But the government (all those highway safety engineers, paving contractors, maintenance crews.. you know..."the government!") doesn't like it when people evade paying, such as by driving a car that uses very little or even no gas at all. Notwithstanding that the government is pushing for such cars."
BTW, a fair number of conservatives don't like it either or why would they assume (erroneously) that I am not paying "my fair share"?
"The solution? Make those who bought them pay by the miles they drive rather than by the gallons they no longer buy."
"Virginia is the latest state to initiate such a program - purely voluntary, of course...for the moment. The Mileage Choice Program, as it is styled, offers participants the option to "save money" - the carrot - by not having to pay the annual highway user fee (which is of course a tax) that owners of hybrids and electric cars are otherwise required to pay to make up for the gas taxes they thought they would be able to avoid paying and thereby actually save money."
He's heard about Nebraska, apparently. He opines "But the mileage tax is subtler. It is easier to increase without triggering an uproar, very much in the same way that streaming TV services add a buck or three to your monthly subscription and most people don't even notice it."
Wrapping up his thesis, "It will be a rude awakening for hybrid and EV drivers - who thought they would be "saving money" by buying cars that use less or even no gas. Especially when the mileage tax is upped to provide the revenue to finance the "investment" in "infrastructure" necessary to keep those hybrids and EVs rolling, namely by the additional generating capacity that will be needed to offset the additional use of that capacity by hybrids (the plug-in ones) and EVs."
He may have missed this memo: [https://insideclimatenews.org/news/12112015/fossil-fuel-subsidies-top-450-billion-annually-study-says/]
Okay, where to start?
Is he arguing that we simply cease maintaining our transportation infrastructure, which we've pretty successfully done already like the 220,000 bridges we've neglected for decades? That's 36% of the bridges in the country. Placed end-to-end, they equal 6,000 miles. While the ARTBA [https://www.artba.org/2021/03/23/over-220000-u-s-bridges-need-repair-latest-analysis-of-federal-data-finds/] has a clearly vested interest, they estimate that 45,000 bridges are "structurally deficient" (SD). Of these, "nearly 11,200 are in 'serious' or worse condition. This includes 1,668 that are in 'critical' condition, 440 that are in 'imminent' failure, and 970 that are in 'failed' condition and are out of service. The states with the most serious or worse bridge conditions are Iowa (1,762 bridges), Oklahoma (922), Illinois (764), Pennsylvania (728), Missouri (700), and Louisiana (638).
Erik might not cross one or more of those bridges in his work day, but Americans cross them 171 million times a day, most of them in gasoline powered cars. Thankfully more of them are electric or fuel-efficient hybrids, the owners of which may, like me, be paying seven times our fair share.
Now, while he offers no recommendations on whether or not to repair all those "SD" bridges, he does speculate that the government will soon assign every American a carbon footprint and if you exceed that limit when driving your electric car, it can throw a supposedly "mandated" "kill switch" [https://jalopnik.com/the-government-is-not-going-to-force-your-car-to-have-a-1848398873] and prevent you from going where you want, when you want. BIG GOVERNMENT as its most sinister!
"When the government decides that more than X miles per week - or day - is "excessive" or "contributing to climate change" - it will be an easy thing to use that kill switch, triggered by the bug in your car letting the (dystopian) DMV know their "customer" has driven too far this week.
He continues..."If it sounds crazy, remember the craziness of the times."
So...EV drivers don't pay that "extortionist" gasoline tax nor should government implement miles-driven fees. Okay, so what's the solution? Paranoia, apparently.
"Understand the common denominator, which isn't that you are a 'customer'."
"Except in the sense that you are to pay whatever they say - and do whatever you're told."
Is this what passes for reasoned dissent at the Spectator? God spare us!
First Published: 2022-07-22
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