Editorial | Avoid roadblocks

Editorial | Avoid roadblocks

If the state wants to encourage electric vehicle production, don't create a hurdle for industry.

One of the most common complaints in this editorial space concerns this state's sorry economic climate, one that discourages job creators by imposing taxes and regulations that encourage them to locate or expand in other states.

Those are legitimate, but vague, complaints that readers may have trouble grasping. After all, everyone complains about taxes and regulations. It can be difficult to separate what's reasonable and necessary from what's not.

But readers won't have a problem figuring out the potential damage caused by a recent proposal to raise the mandatory registration fees for electric vehicles from $17.50 a year to $1,000 a year.

The proposal was made by state Sen. Martin Sandoval, a Chicago Democrat, as part of his proposal to secure funding for a capital improvements bill. In addition to the electric vehicle fees, Sandoval wants to raise the gasoline tax from 19 cents per gallon to 44 cents per gallon, as well as dramatically increase fees for driver's license renewal and car registration.

Electric vehicles aren't a big deal yet. There were just an estimated 6,400 electric vehicle sales in Illinois last year.

But they could be the new big thing. Tesla, which is struggling, has made a big splash in the marketplace. It sold 245,000 vehicles last year. The major auto companies have their own electric vehicle strategy.

And there's another company — Michigan-based Rivian — that's trying to make Illinois a hot spot for electric vehicle manufacturing.

Rivian purchased the now-closed Mitsubishi plant, which is located in Normal, in 2017. Rivian plans to begin producing electric vehicles in 2020, and it has indicated that it hopes to have 1,000 employees there by 2024.

That may sound like so much pie in the sky. But Rivian founder R.J. Scaringe has attracted major backers that include deep-pocket investors.

Just a few weeks ago, Ford announced that it will invest $500 million in the plant. Ford's chairman said Ford is joining up with Rivian because "there's a great benefit from working with a clean-sheet approach" both in terms of research and cost savings.

As a consequence, Rivian officials are excited about the prospect of selling electric vehicles, and McLean County officials are excited about the economic impact of the jobs that will be created.

State economic officials also are optimistic. They have offered Rivian nearly $50 million in state tax credits that are based on Rivian meeting a series of hiring goals — hiring 35 new employees by December, 465 by 2021 and 1,000 by 2024.

But while state officials are trying to boost Rivian's prospect on one hand, along comes state legislators trying to impose burdensome taxes on the other.

Electric vehicles are expensive — Rivian's pickup truck and SUV are expected to cost about $70,000. Maybe motorists who can afford that won't mind kicking in another $1,000 every year.

But part of the plan behind electric vehicles is to enhance production and refine technology in ways that drive costs down so they can be more affordable to the everyday person.

Some things never change. Henry Ford industrialized the production process so he could build more cars and sell them at lower prices.

So how well advised is it for legislators to contemplate placing a financial hobble on an industry whose growth the state is trying to encourage? It appears to be the height of folly.

The outcry against the $1,000 annual electric vehicle fee has been strong. So it might not go anywhere. But it's a good example of the potential harm legislators can do to businesses whose success would be a blessing to all.

Sections (2):Editorials, Opinion
-