Big oil declares war on the electric car

New lobby group funded by Koch brothers will try to convince governments to end electric vehicle subsidies

Oil versus electricity: Protesters attend a rally in Beverly Hills, California demanding the Los Angeles Times not be sold to the Koch Brothers, portraits of which were held up. Charles and Bill Koch have donated millions to various conservative causes, including a new lobby group opposing electric cars. Photograph:  Joe Klamar/AFP

Oil versus electricity: Protesters attend a rally in Beverly Hills, California demanding the Los Angeles Times not be sold to the Koch Brothers, portraits of which were held up. Charles and Bill Koch have donated millions to various conservative causes, including a new lobby group opposing electric cars. Photograph: Joe Klamar/AFP

 

The Koch brothers are a cheery pair. Super wealthy, they control Koch Industries, America’s second-largest privately owned corporation, and they are famously reclusive.

However, the Koch’s collective forehead peeped briefly above the parapet just recently when it was announced that they were funding, to the tune of $10 million, a new lobby group whose sole purpose is to try and lob a spanner into the workings of the electric car.

Not any one electric car, you understand, but all of them. The Koch’s vast fortune (estimated to rake in $115 billion every year) comes primarily from oil, and if the car buyers of the US and the world were to make a massive switch to electric or hybrid motoring, then that would put quite the crimp on the Koch family trust fund.

Although nothing has yet been officially confirmed, Koch Industries board member James Mahoney and veteran US oil industry lobbyist Charlie Drevna have apparently been tapped to lead the new pressure group.

America is increasingly self-sufficient when it comes to oil. A major cause of the global drop in oil (and therefore pump) prices has been the vast expansion of American shale gas and oil extraction, or fracking as it is commonly known.

The practice has come under repeated fire for its allegedly dreadful environmental harm but the fact is that it has brought the cost of filling your car down, and made America apparently immune to oil-price meddling by the OPEC cartel.

Sales of hybrids, plug-in hybrids and electric vehicles (EVs) are already down. According to the Detroit News, sales of all battery-assisted or powered vehicles were down sharply in 2015, with cars such as the Chevrolet Volt seeing savage discounts of as much as $9,000 to prop up sales.

Analysts tempered some concerns by pointing out the fall in sales was as much to do with ageing product as falling oil prices, but the fact is that buyers have been shifting away from their fuel-sipping hybrids and back into SUVs, crossovers and pickups.

This puts car makers in something of a squeezed position. If upcoming regulations, such as the EU’s 95g/km average CO2 limit for 2020, and the 2017 California Clean Air Bill are going to be met, then electrification of the car is hugely necessary. If customers are voting with their feet and switching into gas-guzzlers, while the oil price is cheap, what are they to do? Refuse to sell?

Tax rules

It doesn’t help that even as the Koch brothers gear up for their anti-electric car assault, it would seem that they don’t even need to bother. The US state of Georgia recently ended its $5,000 rebate on electric vehicles, while the US congress has repeatedly baulked at calls to expand EV subsidies to as much as $10,000.

In the UK, chancellor George Osborne recently altered the tax rules for electric and hybrid cars, so that from 2017 only zero-emission, pure electric vehicles will qualify for free road tax – currently anything emitting less than 100g/km does.

What about here? Well, currently Irish buyers can qualify for some hefty discounts on electric and plug-in cars. If it’s a pure electric, you get a €5,000 rebate on Vehicle Registration Tax (VRT) and a €5,000 grant from the Sustainable Energy Authority of Ireland (SEAI). Buy a plug-in hybrid and you get the SEAI grant and a €2,500 VRT kickback. Will those grants stay in place? Well, we haven’t even got a government to ask at the moment but they’ve never been open-ended. And what if an actual anti-electric lobbying campaign starts up? What then?

“Those trying to stop progress will find themselves on the wrong side of history. That electric cars garner the attention of fossil interests shows how serious they think that threat is now. Besides, it would be nice if the brothers were equally concerned about subsidies to the fossil fuel industry that amounted to $5.3 trillion last year, according to the IMF,” Transport & Environment’s executive director Jos Dings told The Irish Times.

“On a good day today’s electric cars will travel 150km on one charge. However, new models will do 300km to 400km, just like Tesla manages to do now. That means electric vehicles are about to leap from a niche market to the mainstream. But our infrastructure takes no account of this and is hobbled by compatibility issues between different charging networks.

“The recharging industry should look at the – rather successful – gas station model and allow motorists to pay however they like. Policymakers need to break through these obstacles. Also, Ireland taxes diesel at 10 cent less per litre than petrol – amounting to an indirect subsidy for the fossil fuel which also has air pollution implications.”

James Nix (formerly of An Taisce) who is director of Green Budget Europe, a think tank of environmental fiscal reform, said: “The most significant subsidy comes in the form of the gap between diesel and petrol taxes. Ireland taxes diesel at 10 cent less per litre than petrol. Over the past year, France has raised diesel tax by 4 cent while Belgium has gone further by committing to a plan to equalise its transport fuel taxes by 2018. The UK already taxes diesel and petrol the same.

“Ireland’s next government can look at similar reforms as the best way to boost low-emission vehicles.”

As for those selling electric cars, Renault Ireland managing director Patrick Magee told The Irish Times: “We’re not aware of any active lobbying against EVs anywhere.

“Like any new technology, there are quarters which are more positive than others, but as more people experience the cars for themselves, either by buying one or vicariously through someone else’s purchase, the barriers and preconceptions are removed.

“In the rest of Europe, especially in the UK, public perception has moved on a lot in the past three years; much less scepticism than there was, and more natural interest and appetite for the cars as people realise what they offer.

“We’re seeing very little impact from falling fuel prices. Look at the sales increase of EVs in the rest of Europe. The key point is that while people are paying less than before to fill up their conventionally fuelled vehicles, prices of petrol and diesel have to fall significantly in order to approach the running costs offered by EVs.

“Feedback from customers is very positive – we know that the first thing which attracts customers are the very low running costs, but once they try the vehicle and subsequently live with it, they are surprised by the level of performance on offer, as well as the way that the car fits effortlessly into their everyday activities.”

Oil industry

That champion of EVs, Tesla’s Elon Musk, took to Twitter both to post a “facepalm” at the news of the Koch brothers’ intentions and also to point out that, according to the International Monetary Fund, fossil fuels receive global subsidies amounting to $10 million every minute – vastly in excess of anything the electric car gets.

Recently, Volkswagen has spoken of creating a Golf-sized electric car with a Tesla-like range and at a cost that is comparable to current petrol cars, subsidy or no subsidy. With the dead hand of the oil industry closing on the electric car’s throat, not for the first time in recent history, such affordable innovation cannot come soon enough.

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