By Lauren Fix
The Biden administration and the Department of Energy colluded to rig estimated gas mileage from EVs to look seven times more efficient than gas powered cars – but they’re not! This is a cheating scandal the government has created to push electric cars and lie to consumers. This is illegal because without the multiplier, the Transportation Department’s proposed rules are completely unattainable. Consumers were scammed with their tax dollars.
Credit to the Wall Street Journal for breaking this story: Under an Energy Department rule, carmakers can arbitrarily multiply the efficiency of electric cars by 6.67. This means that although a 2022 Tesla Model Y tests at the equivalent of about 65 miles per gallon in a laboratory (roughly the same as a hybrid), it is counted as having an absurdly high compliance value of 430 mpg. That number has no basis in reality.
Until recently, Washington regulators kept a special EV subsidy related to this, a secret. Carmakers and regulators liked it that way. Regulators could announce what sounded like stringent targets, and carmakers would nod along, knowing they could comply by making electric cars with arbitrarily boosted compliance values. Consumers would unknowingly foot the bill and the headaches.
Now, the secret is out. After environmental groups pointed out the illegality of this charade, the Energy Department proposed eliminating the 6.67 efficiency multiplier for electric cars, recognizing that the number “lacks legal support,” and has “no basis.” Let’s not mince words — this has a direct impact on a subsidy that indirectly and illegally taxes YOU, the people. Your taxes dollars are going directly into the pockets of these corporations for falsely complying arbitrarily set standards. Remember, you are the one paying for these subsidies. And that goes for any subsidy.
Carmakers have panicked and asked the Biden administration to delay any return to legal or engineering reality. That is understandable. Without the multiplier, the Transportation Department’s proposed rules are completely unattainable. But workable rules don’t require government-created cheat codes. Carmakers should confront that problem head on.
The Journal noted this scandal is buried deep in the Federal Register—on page 36,987 of volume 65. Since the tax credits “lack legal support,” and have “no basis”, all the beneficiaries should have to return their illegal gains.
The biggest beneficiary is Tesla. This is where Tesla makes its profits. They sell the carbon credits to other brands that don’t make and sell enough EVs to meet the EPA standards. All other brands lose money on each electric vehicle.
For over 4 years, Tesla has been drawing attention by reporting record-breaking income from selling carbon credits. The automaker reported a revenue of $554 million from the Q3 2023 sale of carbon credits, significantly contributing to its profits. This record sales also represented a huge portion of Tesla’s net income. Most notably, its 3rd quarter carbon credit revenue increased 94% year-over-year, marking the value of Tesla’s EV production. Its soaring carbon credit income steadily contributes to its overall profits.
It’s not known who exactly bought the credits and for how much, but they are sold to other car companies that missed out on emissions standards of the California Air Resources Board (CARB) and the EPA.
Just to be clear, this is wrong morally, and likely is illegal if challenged in court. This is a massive scandal reminiscent of the diesel-emissions cheating that rocked Germany’s automakers.
The Energy Department, in response to the outcry, proposed to abolish the unjustified multiplier. However, this move was met with resistance from automakers who requested the Biden administration to delay any changes aligning with legal and engineering standards. Their argument hinges on the belief that the proposed rules would be unattainable without the aid of this multiplier.
This was the governments way of getting automakers on boards with EVs. Forcing them into compliance. Now the government is going to remove this EV factor and implode automakers because they will not be able to comply with the EPA’s regulations. As it stands, automakers are having to invest in EVs and gas powertrains because the government is increasing the stringency on both. Automakers can only invest in so many technologies and vehicles. All of these extra costs forced by the government is making it too expensive to have more vehicle options.
This inflated figure is not simply a boastful statistic. It serves as a conduit for carmakers to accumulate compliance credits, which can then be traded for cash. In essence, this creates a subsidy that is indirectly funded by consumers who purchase new gasoline-powered vehicles. This issue remained largely invisible to the public eye until recently, when environmental groups brought its illegality into the spotlight.
The whole Carbon Credit scam was not created for Tesla, it was created to get consumers to buy electric vehicles. The timing of this revelation is suspicious. Suddenly the government is not a fan of Elon Musk, is this a coincidence, we shall see.
So who actually knew about this? The government must have known when they created the program, did car manufacturers know about the scam too? It’s the old question: what did they know and when did they know it. Watch the Tort bar, I’m sure they are already on this scam. They’ll have a field day with this because there are lots of big pockets to dip into.
Did you buy an electric car? Next you’ll be hearing commercials about class action law suits.
Lauren Fix, The Car Coach®, is a nationally recognized automotive expert, analyst, author, and television host. A trusted car expert, Lauren provides an insider’s perspective on a wide range of automotive topics and aspects, energy, industry, consumer news, and safety issues.
Lauren is the CEO of Automotive Aspects and the Editor-in-Chief of Car Coach Reports, a global automotive news outlet. She is an automotive contributor to national and local television news shows, including Fox News, Fox Business, CNN International, The Weather Channel, Inside Edition, Local Now News, Community Digital News, and more. Lauren also co-hosts a regular show on ABC.com with Paul Brian called “His Turn – Her Turn” and hosts regular radio segments on USA Radio – DayBreak.
Lauren is honored to be inducted into the Women’s Transportation Hall of Fame and a Board Member of the Buffalo Motorcar Museum and Juror / President for the North American Car, Utility & Truck of the Year Awards.
Check her out on Twitter and Instagram @LaurenFix.
