Ford is adding 700 new jobs to a Michigan plant to build electric and autonomous vehicles, and canceled the production of a plant in Mexico. Could they get a clean-air tax credit for self-driving cars?
Ford announced today that they are adding 700 new jobs to and investing $700 million in their Flat Rock Assembly Plant in Michigan to manufacture electric and autonomous vehicles. They also stated that they have canceled the building of a plant in Mexico, which would have cost $1.6 billion.
— Ford Motor Company (@Ford) January 3, 2017
Ford President and CEO Mark Fields said in a statement that, “We’re also encouraged by the pro-growth policies that President-elect Trump and the new Congress have indicated that they will pursue.”
But Fields told CNN in an exclusive interview that Ford had cut no special deals with President-elect Donald Trump like Carrier did last month to keep jobs in Indiana, a deal that is still being negotiated. (And will not save as many jobs as initially claimed.) “We didn’t cut a deal with Trump. We did it for our business,” Fields said to CNN’s Poppy Harlow on Tuesday.
However, there could be several environmental tax incentives at play, and not all of them are particularly pretty.
Bloomberg reported last month that Fields planned to “lobby the new president to soften US and state fuel-economy rules,” because, “They hurt profits by forcing automakers to build more electric cars and hybrids than are warranted by customer demand.” Fields complained that, “In 2008, there were 12 electrified vehicles offered in the US market and it represented 2.3 percent of the industry … Fast forward to 2016, there’s 55 models, and year to date it’s 2.8 percent.”
On Tuesday, however, Ford’s sentiment about electric vehicles was quite different. At Ford’s press conference, officials said that, “Ford believes electric vehicles will outsell gas-powered vehicles within the next 15 years,” and that, “Ford is planning to roll out seven new electric vehicles in the next five years, including a Mustang Hybrid.”
One must wonder that if fuel-economy rules will be lowered, then Ford will get more tax credits for building electric cars, or some combination of both.
Another possibility is that Ford will be eligible to receive a clean air tax credit for developing self-driving cars. Bloomberg also wrote last month that, “The auto industry,” including Ford, “may seek clean-air credits for self-driving cars, which could reduce fuel consumption and emissions by helping traffic move more smoothly.”
If a clean-air tax credit for autonomous vehicles comes through, though, it does not seem as environmentally beneficial as a tax credit for electric cars. Scientific American writes that smart transportation systems, including self-driving vehicles, “could achieve a 2 to 4 percent reduction in oil consumption and related greenhouse gas emissions each year over the next 10 years,” citing an Intelligent Transportation Society of America report. There are also conflicting reports on whether or not self-driving cars would be good for the environment at all. On the other hand, according to the US Department of Energy’s Alternative Fuels Data Center, hybrid and electric vehicles reduce emissions by at least half in comparison to gasoline-powered cars and trucks. While not a direct counter example, it appears that self-driving cars are less able to reduce greenhouse gas emissions than hybrid and electric vehicles.
We have contacted Ford officials about whether they received an electric car tax credit, a promise that the Trump Administration will lower fuel-economy rules, or a clean-air tax credit for autonomous vehicles in exchange for their decision to add 700 jobs in Michigan and halt work on their Mexico plant. If we receive a reply or this story develops, we will update this article.
*Update, 4:13 p.m. EST: We clarified the environmental implications of the second to last paragraph after a thoughtful reader’s comments.