ATLANTA (AP) – Car dealers say they expect sales in electric vehicles will drop now that Georgia is eliminating a tax credit to subsidize them.
Gov. Nathan Deal, a Republican, is expected to soon sign legislation eliminating the $5,000 tax credit June 30. The following day, Georgia will begin imposing a $200 registration fee on those vehicles.
Bo Scott of the Regal Nissan dealership in Roswell said his firm sells or leases about 100 Leafs a month. He said he expects a 70 percent decline in Leaf sales after the new law takes effect. The general manager at Town Center Nissan in Kennesaw, Kenny Grant, said he also expected sales will slide.
“We are kind of ticked off about it,” Grant told The Atlanta Journal-Constitution. “We expected if something like the tax credit is going away, it shouldn’t go cold turkey. It should have been phased out.”
Grant said the dealership might see a temporary increase in sales as customers try to acquire a Leaf before the tax credit expires. Grant is warehousing about 400 Leafs, roughly 250 more than usual.
When the credit first passed in 1998, metro Atlanta had violated federal air quality standards for ozone for two decades. Vehicle emissions were the single largest source of air pollution. With the support of then-Gov. Zell Miller, the General Assembly approved a tax credit of up to $1,500 for individuals and businesses that leased or bought an alternative-fuel motor vehicle. Two years later, the credit was increased to $2,500 for all low-emissions vehicles. The following year, it was doubled to $5,000 for zero-emission vehicles.
Rep. Chuck Martin, R-Alpharetta, first proposed eliminating the tax credit last year. He said the credit served its purpose by stimulating the electric vehicle market in Georgia. But given its rising popularity, it was costing the state about $50 million annually.
“It was too generous, too targeted and too open-ended,” Martin said. “It’s a 17-year-old policy that technology bypassed.”
Martin said he may consider proposing a smaller credit next year.