Electric school buses that were supposed to cut one Maryland county school system's transit costs in half actually cost the system millions of dollars. A report by the Montgomery County Office of the Inspector General found the buses were often delivered late and frequently had mechanical issues that "rendered them inoperable for extended periods." As a result, the school system had to spend more than $14.7 million to buy 90 diesel buses to cover routes. The delays and repair issues entitled the school system to more than $372,000 in penalties from the contractor, but no administrator ever pursued it.

The post Brickbat: Electrifying appeared first on Reason.com.

VinFast, a Vietnamese automaker that builds electric vehicles, announced in July that it would not begin production at its North Carolina plant for another four years. While the news is certainly a setback, the disappointment is compounded by the fact that the state is trying to bulldoze a number of private homes, and a church, to make the project happen.

In March 2022, North Carolina Gov. Roy Cooper announced that VinFast would build its first North American plant in Chatham County. The company would spend $4 billion and create 7,500 jobs, with production from the completed factory set to begin in July 2024. At its peak, the facility would be capable of producing 150,000 vehicles per year.

In exchange, North Carolina lawmakers agreed to give the company $1.25 billion in incentives, including $450 million for infrastructure, including "roadway improvements" and building out the water and sewer capacity; $400 million from the county; and a $316 million state grant paid out over 32 years, linked to the company's job creation promises. In effect, North Carolina taxpayers would be financing over 30 percent of the project.

President Joe Biden called the project "the latest example of my economic strategy at work." CNBC lauded the state's Democratic governor and Republican Legislature for "managing to put aside their very deep political divisions to boost business and the economy" when it named North Carolina America's Top State for Business.

But within two years, the deal was on shaky ground. The company announced in March 2023 that it would not be able to begin production at the factory until at least 2025 "because we need more time to complete administrative procedures," according to a company spokesperson.

Then in July 2024, in a press release about manufacturing output in the previous quarter, VinFast announced that it had "made the strategic decision to adjust the timeline for the launch of its North Carolina manufacturing facility, which is now expected to begin production in 2028," in order to "optimize its capital allocation and manage its short-term spending more effectively."

While this is disappointing news for many—company executives, shareholders, North Carolina state officials—it's worse for residents in the area.

Many of the state and county incentives are dependent upon VinFast meeting certain metrics: While the state doled out $125 million to reimburse the company for site preparation costs, it can claw back that entire amount if VinFast fails to hire at least 3,875 people—just over 50 percent of the required total. There are further clawback provisions if it doesn't hire at least 6,000 people and doesn't invest at least $2 billion into the project.

But even if the deal falls apart and the state gets its money back, some things can't be undone. As part of the deal, the North Carolina Department of Transportation (NCDOT) would conduct "roadway improvements" at the future site of the facility. As detailed in an August 2022 project overview, "private property is needed to construct the improvements proposed by the roadway project." And while the NCDOT "works to minimize impacts such as the number of homes and businesses displaced by a road project, some impacts are unavoidable."

In total, the state expected that the roadwork would "impact" five businesses, 27 homes, and Merry Oaks Baptist Church, which had stood since 1888. This meant the state was authorized to purchase the properties from the owners—or if the owners refused to sell, the state could simply take the properties through eminent domain.

Eminent domain, authorized by the Takings Clause of the Fifth Amendment, allows government entities to seize private property for public use, as long as the owner receives "just compensation." Of course, the only thing that separates this from a normal real estate transaction is that the use of eminent domain implies that the property owner did not want to sell but was forced to anyway.

While an electric car factory does not qualify as a "public use," the state is planning to bulldoze the houses, businesses, and church to make way for a new roadway interchange that will accommodate traffic to and from the site. Of course, under the U.S. Supreme Court's 2005 decision in Kelo v. New London, the state would also have been justified to seize property to give to a purely private party, with Justice John Paul Stevens writing that "there is no basis for exempting economic development from our traditionally broad understanding of public purpose."

In fact, that seems to be just what happened: In July, after VinFast announced its latest delay, the Raleigh News & Observer reported that so far the state had spent $96 million—nearly all of it on site preparation and infrastructure—and purchased four homes, with negotiations ongoing with other homeowners and two businesses. And sadly, "North Carolina has acquired two businesses and Merry Oaks Baptist Church through eminent domain, meaning negotiations fell short and the state took over the land after paying the previous owners fair market values assessed by a state-approved appraiser."

In July 2023, VinFast offered to donate up to three acres of land from its 2,000-acre parcel to Merry Oaks Baptist Church so the congregation could relocate. But a better solution would have been for VinFast to simply shoulder the burden of development in the first place, first by footing the bill for the project itself and then by obtaining land where the government did not forcibly remove any obstacles in the way.

The post VinFast Delays Production After North Carolina Seizes Property for Factory Site appeared first on Reason.com.

Republican vice presidential nominee J.D. Vance has been in the news for an old clip of him talking about how the tax code should punish adults without kids. While Vance's proposal probably aims to address demographic concerns, it represents a misguided approach that contradicts fundamental principles of economic freedom and fairness.

And you know what? That's precisely what our tax code already does, in this case and many others.

Using the tax code to "reward" parents and "punish" nonparents is at odds with the idea of a neutral, efficient tax system. In an ideal and fair world, the tax base would be broad but taxed at a low rate. People making the same income should be paying the same level of taxes no matter how they choose to live their lives.

Unfortunately, the tax code is neither fair nor neutral. It punishes and rewards all sorts of behaviors based on what government officials decide is good or bad.

For instance, the tax code does, in fact, treat people with kids more favorably than it treats those who do not have kids.* There's the child tax credit, of course. Then there's the earned income tax credit, which is more generous for families with children than those without. And there is no shortage of other provisions, such as a very significant deduction for heads of households and another for dependent care, which do the same thing.

It's hard to know what Vance's proposal really entails. Does he want another surtax on childless parents? Does he want to expand the child tax credit and make it a universal basic income like many conservatives and progressives want? It's also unclear whether he is simply failing to see that our tax code already delivers on his wishes and punishes childless adults. Either way, I assume he is well intentioned and that he is rightfully concerned about the decline in fertility we are witnessing not just in this country but across the world.

Unfortunately, punishing childless parents with additional taxes wouldn't boost fertility. For one thing, we've had a child tax credit since the 1990s, and the tax break has been regularly extended. That hasn't encouraged people to have more kids.

That's not unique to the child tax credit. Lots of evidence exists showing that government programs of all sorts meant to encourage, reward, or stimulate the supply of babies usually fail. One of the most dramatic examples is South Korea. The country has spent over $200 billion on such policies over the past 16 years, and fertility rates are still falling.

There isn't any doubt that more people, and hence more babies, are a boon for our lives and our economy. But that alone isn't a good reason for government subsidies. And while raising kids is expensive, that's no justification for a government tax break, either.

Besides, careful studies have shown the cost of raising a child in America has been decreasing for six decades. In the end, rather than rewarding families with lesser taxes at the expense of childless adults, I would encourage advocates to focus on removing existing government barriers—like overzealous policies that make child care more expensive without making kids measurably safer—that make life more complicated for families.

Ultimately, these are only secondary aspects of a much bigger debate. Our tax code is incredibly unfair. It's not just childless adults that face a surcharge compared to parents. Tax breaks for homeowners mean that renters pay more money for the same amount of housing. Households which include a college student pay less in taxes. People who can afford an electric vehicle can secure a tax break that others cannot.

These tax breaks for some are not just unfair to the taxpayers who don't get them—they also turn our tax code into a complicated mess that requires many millions of collective hours to comply with. Instead of adding more complexity and bias, we should be moving in the opposite direction—toward a simpler, flatter, and more neutral code that treats all taxpayers equally.

Using the tax code as a tool for social engineering is misguided. It leads to economic inefficiencies and infringes on individual liberty. Rather than doubling down on the problematic aspects of our current system, we should be working toward comprehensive reform. Only then can we hope to see taxes as something that truly serves the interests of all Americans, regardless of their personal choices.

COPYRIGHT 2024 CREATORS.COM

*CORRECTION: The original version of this article misstated in part who benefits more from the current tax code.

The post J.D. Vance Wants To Control You With Taxes appeared first on Reason.com.

Noted energy expert Marjorie Taylor Greene took to the stage today to deliver one of her famous sermons on the mount of ignorance. This time Greene shared an important message for the MAGA patriots who attended her lecture. "If you think gas prices are high now, just wait until you're forced to drive an electric vee-hick-ull," she said. — Read the rest

The post Fact-free Marjorie Taylor Greene peddles delusional fantasy about electric cars appeared first on Boing Boing.

In 2021, the Infrastructure Investment and Jobs Act included $7.5 billion to build 500,000 public charging stations for electric vehicles (E.V.s) across the country in an effort to boost a switch to the use of clean energy.

As Reason reported in December, not one charger funded by the program had yet come online. Now, six months later, the number of functional charging stations has ticked up to eight.

That news comes from an Autoweek article earlier this month. In March, The Washington Post reported that only seven were built; a charging station in Bradford, Vermont, opened in April, containing four E.V. fast chargers. Public chargers are either Level 2, which use alternating current electricity and take several hours to fully charge an all-electric vehicle from empty, or Direct Current Fast Charging (DCFC) superchargers, which use direct current and can charge in less than an hour.

Why so little progress? Alexander Laska of the center-left Third Way think tank told Autoweek's Jim Motavalli that the federal cash "comes with dozens of rules and requirements around everything from reliability to interoperability, to where stations can be located, to what certifications the workers installing the chargers need to have." Laska says the regulations "are largely a good thing—we want drivers to have a seamless, convenient, reliable charging experience—but navigating all of that does add to the timeline."

A spokesperson with the National Electric Vehicle Infrastructure (NEVI) program, which administers $5 billion of the $7.5 billion total, further told Motavalli that the delay is because "we want to get it right."

Thankfully, federal grants aren't the only way to build out charging infrastructure.

"US drivers welcomed almost 1,100 new public, fast-charging stations in the second half of 2023, a 16% increase," Bloomberg's Kyle Stock reported in January. And not just in big cities or progressive enclaves: Deep-red Idaho "switched on 12 new [DCFCs] between July and December," while "Alabama, Arkansas, Mississippi and Tennessee welcomed 56 new fast-charging stations in the second half of 2023, an infrastructure increase of one-third."

While Stock notes that $5 billion of federal money is expected to roll out soon, "the vast majority of chargers added in the US last year were bets by for-profit companies on the future of battery-powered driving."

The most prominent company by far is Tesla, whose network of Superchargers includes over 57,000 DCFC chargers around the world and generated an estimated $1.74 billion of revenue in 2023 alone. Just in the fourth quarter of 2023, the company built 357 new stations, accounting for 3,783 charging ports.

Around two-thirds of all public chargers in the U.S. are manufactured for Teslas, but the company has also expanded its network for its competitors to use: In the 2025 model year, most major automakers' E.V.s will use the same charge port as Teslas and be able to access the Supercharger network.

Rivian, a Tesla competitor, is also building out its own DCFC network: In February 2024, it counted 400 chargers in 67 locations, with plans to expand further, and just like with Tesla's Superchargers, Rivian plans to make its chargers accessible to other models.

In fairness, both Tesla and Rivian have benefited from government handouts: State and local governments in Georgia promised Rivian a raft of incentives worth up to $1.5 billion. And Tesla has received at least $2.8 billion in federal, state, and local subsidies over the years, despite CEO Elon Musk's professed distaste for government intervention in the economy. In fact, Politico found in February that Tesla was the single largest recipient of funds disbursed by the federal NEVI program, winning "almost 13 percent of all EV charging awards from the law, earning it a total of more than $17 million in infrastructure grants."

But those companies still provide the best template for expanding access to public chargers.

While proponents of the federal regulations may defend the amount of red tape involved in the federal program, with demands on where a charging station can be placed and the types of licenses people need to build one, the fact is that the private sector is already building out a nationwide E.V. charging network that will be available to most drivers.

The post $7.5 Billion in Government Cash Only Built 8 E.V. Chargers in 2.5 Years appeared first on Reason.com.

President Joe Biden says, "I know how to make government work!"

You'd think he'd know. He's worked in government for 51 years.

But the truth is, no one can make government work.

Biden hasn't.

Look at the chaos at the border, our military's botched withdrawal from Afghanistan, the rising cost of living, our unsustainable record-high debt.

In my new video, economist Ed Stringham argues that no government can ever work well, because "even the best person can't implement change….The massive bureaucracy gets bigger and slower."

I learned that as a consumer reporter watching bureaucrats regulate business. Their rules usually made life worse for consumers.

Yet politicians want government to do more!

Remember the unveiling of Obamacare's website? Millions tried to sign up. The first day, only six got it to work.

Vice President Joe Biden made excuses: "Neither [Obama] and I are technology geeks."

Stringham points out, "If they can't design a basic simple website, how are they going to manage half the economy?"

While bureaucrats struggled with the Obamacare site, the private sector successfully created Uber and Lyft, platforms like iCloud, apps like Waze, smartwatches, etc.

The private sector creates things that work because it has to. If businesses don't serve customers well, they go out of business.

But government is a monopoly. It never goes out of business. With no competition, there's less pressure to improve.

Often good people join government. Some work as hard as workers in the private sector.

But not for long. Because the bureaucracy's incentives kill initiative.

If a government worker works hard, he might get a small raise. But he sits near others who earn the same pay and, thanks to archaic civil service rules, are unlikely to get fired even if they're late, lazy, or stupid.

Over time, that's demoralizing. Eventually government workers conclude, "Why try?"

In the private sector, workers must strive to make things better. If they don't, competitors will, and you might lose your job.

Governments never go out of business.

"Companies can only stay in business if they always keep their customer happy," Stringham points out. "Competition pushes us to be better. Government has no competition."

I push back.

"Politicians say, 'Voters can vote us out.'"

"With a free market," Stringham replies, "the consumer votes every single day with the dollar. Under politics, we have to wait four years."

It's another reason why, over time, government never works as well as the private sector.

Year after year, the Pentagon fails audits.

If a private company repeatedly does that, they get shut down. But government never gets shut down.

A Pentagon spokeswoman makes excuses: "We're working on improving our process. We certainly are learning each time."

They don't learn much. They still fail audits.

"It's like we're living in Groundhog Day," Stringham jokes.

When COVID-19 hit, politicians handed out almost $2 trillion in "rescue" funds. The Government Accountability Office says more than $100 billion were stolen.

"One woman bought a Bentley," laughs Stringham. "A father and son bought a luxury home."

At least Biden noticed the fraud. He announced, "We're going to make you pay back what you stole!

No. They will not. Biden's Fraud Enforcement Task Force has recovered only 1 percent of what was stolen.

Even without fraud, government makes money vanish. I've reported on my town's $2 million toilet in a park. When I confronted the parks commissioner, he said, "$2 million was a bargain! Today it would cost $3 million."

That's government work.

More recently, Biden proudly announced that government would create "500,000 [electric vehicle] charging stations."

After two years, they've built seven. Not 7,000. Just seven.

Over the same time, greedy, profit-seeking Amazon built 17,000.

"Privatize!" says Stringham. "Whenever we think something's important, question whether government should do it."

In Britain, government-owned Jaguar lost money year after year. Only when Britain sold the company to private investors did Jaguar start turning a profit selling cars people actually like.

When Sweden sold Absolut Vodka, the company increased its profits sixfold.

It's ridiculous for Biden to say, "I know how to make government work."

No one does.

Next week, this column takes on Donald Trump's promise: "We'll drain the Washington swamp!"

COPYRIGHT 2024 BY JFS PRODUCTIONS INC.

The post No One Can Make Government Work appeared first on Reason.com.

Luxury electric automaker Rivian made several big announcements this week related to its expanding product line. At the same time, though, the company announced that it would pause construction on a factory in Georgia that received some of the most generous taxpayer-funded incentives in state history.

On Thursday, Rivian unveiled three new vehicles that will be available in the coming years. The company already offers the R1T and R1S, a luxury truck and SUV, respectively, which start at $70,000–$75,000 and can cost $100,000 or more. CEO R.J. Scaringe announced the R2, a smaller and more modest SUV that would be available in 2026 with prices starting at $45,000, as well as the R3 and R3X crossovers, also expected to be less expensive than the R1 series.

As Reason has documented, Rivian went public in November 2021, promising luxury electric vehicles that would be both stylish and rugged. The following month, the company—which only had a single factory in Illinois—struck a deal to build its second factory in Georgia: Rivian would spend $5 billion on the factory, and in exchange, Georgia state and local governments authorized up to $1.5 billion in tax credits and incentives.

In the years since, however, the company has struggled. In May 2023, Bloomberg reported that the company had lost 93 percent of its share value, and its market cap reflected "almost no value beyond the company's cash hoard." In the fourth quarter of 2023, the company lost $43,372 on each vehicle sold, up from a $30,648 per-vehicle loss in the third quarter.

Branching out into the more affordable R2 and R3 models is key to Rivian's long-term survival, opening up its product line to appeal to more than just those who can pay over $75,000 for a luxury vehicle. And to do this, it had to make some adjustments.

"To enable R2 to be launched earlier and with a considerable reduction in the capital required for its launch, Rivian plans to start production of R2 in its existing Normal, Illinois manufacturing facility," the company announced. It is also pausing construction in Georgia: "Rivian's Georgia plant remains an extremely important part of its strategy to scale production of R2 and R3. The timing for resuming construction is expected to be later to focus its teams on the capital-efficient launch of R2 in Normal, Illinois."

The move is expected to save the company $2.25 billion "as compared to the original forecast of launching the first line of R2 production at Rivian's Georgia site."

In October, the company announced that the Georgia site was "95 percent graded" and "nearly ready for construction to begin." Notably, under the incentive agreement, Georgia officials paid over $32 million for "clearing and grading" the site.

One year ago, almost to the day, Scaringe reaffirmed the company's dedication to the Georgia project, telling The Atlanta Journal-Constitution, "We're committed to this state and this project," adding that "the future of our company in terms of scaling and growing really relies on the future of this project. There's not another option. We're not planning an alternative. This must work."

The electric vehicle market, while growing, is in flux, due to softening consumer demand and persistently high interest rates. Just last month, Apple—the first company in history to ever record a $3 trillion valuation—canceled its decade-long quest to develop an electric car. General Motors and Ford have also rolled back pledged investments in electric vehicles.

In that sense, Rivian's pivot would be perfectly reasonable—companies must be free to adapt to changing circumstances in a way that benefits both their customers and their shareholders. But as with any central planning scheme, state economic incentives don't tend to allow for those sorts of dynamic pivots. In this case, Georgia officials mortgaged a large amount of taxpayer money on a plan that foresaw the company continuing on a path that no longer seems financially feasible.

The post Rivian Pauses Construction at Factory That Costs Georgia Taxpayers $1.5 Billion appeared first on Reason.com.

E-bikes are today a growing component of the global transition away from fossil fuels—possibly more than the car-and-truck-focused sustainability crowd appreciates. E-bikes’ rapid growth in recent years stems in part from their simple solution to the range issue that big, hulking cars typically don’t offer. E-bikes are powered by relatively small batteries that can be wrangled by the average person who can handle a carton of milk.

Because of that form factor, battery swapping for e-bikes is a quick and simple method for staying powered up, whereas for a traditional four-wheeled EV, swaps are a more involved process for doing the equivalent of filling a gas tank.

The Japanese conglomerate Yamaha Motor Co., best known for its motorcycles and motorboats, is now looking to expand into this growing marketplace, too. At the end of last year, Yamaha announced it’d formed a subsidiary called Enyring. The new entity, which is slated to kick off operations in Germany and the Netherlands in early 2025, says they’ll partner with manufacturers for maximum compatibility among models and types of e-bike. Also crucial to Yamaha’s plan is that the batteries will not be owned, but rented, by the e-bike owners. The rental contract will entitle a battery user to unlimited swaps as long as their account with Yamaha remains in good standing. And Yamaha says it already has plans in place for breaking down the cells so they can be recycled.

“Today, noisy, polluting, two-stroke gasoline engines are still ubiquitous across Asia,” says Sam Abuelsamid, Principal Research Analyst for Mobility Ecosystems at Guidehouse Insights “Converting those to electric power will go a long way toward helping countries reach their greenhouse gas emission-reduction targets. Battery swapping also addresses the infrastructure issues that come along with the growing presence of two- and three-wheeled vehicles.”

Abuelsamid notes that as this energy-replenishing modality becomes the norm, companies like Yamaha, China’s Nio, and Taiwan’s Gogoro (the latter two with hundreds of battery-swapping stations and self-service swapping kiosks already in operation) will raise the bar on quality control for these small EV batteries for their own economic self-interest.

“It makes sense to build better batteries with good battery management systems and software for enhanced thermal control,” says Abuelsamid. “Higher-quality batteries, handled in an ecosystem where corporate facilities manage the recharging process better than someone would at home, increases the chances that a battery will handle maybe 1,000 charge cycles before it no longer holds enough charge and needs to be recycled.” And longer life means more profitability for a company offering batteries-as-a-service.

The vast e-bike marketplace

In 2022, two- and three-wheeled vehicles accounted for 49 percent of global EV sales. And according to a recent report from Rethink Energy, there are an estimated 292 million e-bikes and e-trikes currently in service. By comparison, the International Energy Agency says there are now about 26 million electric cars on the world’s roads.

According to analysis firm Markets and Markets, battery swapping was a US $1.7 billion industry in 2022. Industry revenues are expected to reach $11.8 billion by 2027. Yamaha is by no means a battery-swapping pioneer, but its entry into that space signals a powerful retort to skeptics who still believe that battery swapping will never be as commonplace as pulling up to a charging facility and plugging in. (However, attempts to reach Yamaha spokespeople for their comment on the Enyring spinoff proved unsuccessful.)

The enticing growth in the compact EV market has been spurred by the near ubiquitous use of e-bikes and electric scooters by couriers for delivery services that drop take-out food and groceries at online shoppers’ doors. Plus, for daily commutes, e-bikes are proving increasingly attractive as eco-friendly alternatives to fossil-fueled vehicles. Battery-swapping ventures like Yamaha’s will also put salve on pain points related to the rapidly growing presence of compact EVs. Among these are: a shortage of places where batteries can be charged; the length of time (now measured in hours) charging usually takes; human error when charging that could cause destructive, and perhaps deadly, battery fires; and uncertainty about what to do with a battery when it is spent and is no longer useful as an energy storage unit for propulsion.

Just as important is what battery swapping will do to solve another of plug-in electric vehicles’ bugbears. IEEE Spectrum reported on the issues surrounding battery charging and the lingering belief that EV batteries are fire hazards. Though empirical evidence shows that EVs, by and large, are much less likely than vehicles with internal combustion engines to catch fire, that hasn’t stopped some municipal governments from placing strict limits on the places where EV batteries can be plugged in. But with battery swapping growing in popularity, who would ultimately need to?