On Friday's broadcast of CNBC's “Squawk Box,” Energy Secretary Jennifer Granholm responded to concerns that copying some of California's policies would raise gas prices by saying, “Electric vehicle Operating costs are low,'' he said, and citizens can receive preferential tax treatment if the conditions are right. If you can afford a lease, you can take it. ”
After Granholm said that policy incentives are converting refineries to biofuels, co-host Becky Quick said:[T]California has adopted some of these policies, saying it wants to peak gasoline usage, and as a result it has adopted increasingly strict policies mandating everything else that reduces gasoline usage. I'm going to legislate. It's unlikely that a company would want to invest in a refinery there, but what you've seen is that gas prices there are much higher than anywhere else in the country, except potentially Hawaii and Alaska. That means it's expensive. But as you can see, prices in California are significantly higher. If voters saw this happening all over the country, they would probably be very dissatisfied, because they would scream every time gas prices went up by $1. ”
Granholm replied: And as you say, all of this is done state by state, so I don't think California taxes or prices would apply to other parts of the country. California is unique.”
Quick then interjected and said, “But they're talking about the same things you're talking about with biodiesel and other issues. If you spread these on a national level, you'll probably get a similar reaction.”
Granholm countered: “But a lot of the price increases, a lot of the price differences with California, a lot higher prices per gallon, also have to do with the gas tax. So, Becky, we're in this transition period right now. I think everyone knows that for consumers, electric cars are significantly cheaper to operate than internal combustion engine cars.”
Then Quick interjected, “It's a tax benefit paid for by taxpayers.”
And Granholm said, “Well, it's — the federal government — there.” [are] Federal tax credits are a benefit if you can take advantage of them and can afford the lease. And of course, leasing is probably cheaper than the monthly payments of a purchase. These tax credits will discount his lease payment by $7,500, making him a truly affordable car. It's much cheaper to have someone else operate it. So we're in this transition period. It's not always going to be smooth and easy, but I think that during this transition, people will start to love electric cars, like people who drive them. According to a J.D. Power study, 95% [are] I'm very happy with electric cars in terms of cost and driving enjoyment. I think this transition will continue to advance. It's currently about 10% of the fleet and will continue to grow at the same pace it has been growing. ”
Quick added:[I]It's not just the gas tax. There's a lot more to it. ”
Granholm responded: “Refineries do exist. There's no question there are other policy issues in California that are impacting prices.” And that's their choice. And that's why electric cars are taking off so heavily in California. But California's policy framework is unlikely to be rolled out on a large scale in the other 50 states. That won't happen. ”
Granholm then added that the price of electric cars will come down as production expands.
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