This is an excerpt from our most recent Economic Outlook report. To access the full PDF, please click here.
I. Defining “Structural Change”
In development economics, structural change is a shift or change in the basic ways a market or economy functions or operates.
Investopedia defines macroeconomic structural change in this way—
“Structural change refers to a dramatic shift in the way a country, industry, or market operates, usually brought on by major economic developments. The key to effect structural change is the dynamism that is inherent in that system.”
I argue in this March 2023 Zacks economics monthly…
The world’s auto producers and consumers are in the throes of a profound structural change, one brought to them by top-down government policy.
Government actors are actively spurring a more rapid adoption of electric vehicles. In turn, they are spurring on the latest info tech sector technologies — in chips, in computer software, and in chemical battery-charging.
This is causing a factory floor revolution -- across all of the world’s automakers.
The economic policies I refer to are climate-change incentives. These pushed forward the rapid rise of electric vehicle (EV) production.
In sum, this amounts to a global economic development initiative, to bring about a sustainable world economy.
One not hamstrung by dramatic climate events. One to limit serious urban air pollution.
From the IMF Survey: What are the key ingredients for sustained growth in a country?
Harvard Economist Dani Rodrik: “I think all sustained episodes of growth are underpinned by fundamental structural change.
“Of course, you can get growth spurts because of an improvement in the terms of trade or a sudden burst of capital inflows. But those tend to peter out unless there is the emergence and expansion of new industries, and movement of labor from traditional industries into modern industries. This is the essence of structural change.
“Without these things happening, a country is not likely to achieve long-term growth.”
II. Electric Vehicle (EV) Structural Change -- in the USA Context
On the www.electricforall.org website, I found these U.S. EV incentives.
At the Federal level, they list three top incentives.
1. You may qualify for a credit up to $7,500 under Internal Revenue Code Section 30D if you buy a new, qualified plug-in electric vehicle. The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles purchased from 2023 to 2032.
2. You may qualify for a credit up to $7,500 under Internal Revenue Code Section 30D if you lease a new, qualified plug-in electric vehicle. The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles leased from 2023 to 2032.
3. Beginning January 1, 2023, if you buy a qualified used electric vehicle (EV) or fuel cell vehicle (FCEV) from a licensed dealer for $25,000 or less, you may be eligible for a used clean vehicle tax credit. The credit equals 30% of the sale price up to a maximum credit of $4,000. Conditions apply.
At the California State level, this website lists three additional top incentives.
1. Beneficial State Bank has committed to providing auto loans at an 8% interest rate or lower to participants of the Clean Vehicle Assistance Program.
2. The California Clean Vehicle Rebate Project (CVRP) offers rebates for the purchase or lease of qualified vehicles. Low-income applicants are eligible for higher incentives.
3. The Consumer Assistance Program provides $1,000 to $1,500 to support the retirement of old, polluting vehicles.
On top of that, the primary electric supplier for Southern California, “South California Edison (SCE) is offering its residential customers a $1,000 rebate for pre-owned battery electric vehicles (BEVs) or plug-in hybrid electric vehicles (PHEVs). Eligible vehicles must be listed on the California high occupancy vehicle (HOV) list.
“Please visit SCE's program requirements page to determine whether you are eligible for the Rebate Plus option, which offers $4,000. Conditions apply.”
Finally, the site lists local Central California Community Energy Initiatives (CCCEA).
Rolled together, a medley of Federal, State, Utility and Local initiatives have been a key economic development initiative, driving forward EV production in the USA.
In particular, within the bellwether state of California.
On Feb. 9th, 2023, data released by the State of California shows the Golden State is indeed making substantial progress toward its EV goals.
In 2022, California's electric vehicle market share increased to over 17%, according to the California Energy Commission and the California New Car Dealers Association.
Still, a 17% California EV market share falls woefully short, inside a global market scene...
Warm Regards,
John Blank
Zacks Chief Equity Strategist and Economist
Image: Shutterstock
The Global Electric Vehicle Shift
This is an excerpt from our most recent Economic Outlook report. To access the full PDF, please click here.
I. Defining “Structural Change”
In development economics, structural change is a shift or change in the basic ways a market or economy functions or operates.
Investopedia defines macroeconomic structural change in this way—
“Structural change refers to a dramatic shift in the way a country, industry, or market operates, usually brought on by major economic developments. The key to effect structural change is the dynamism that is inherent in that system.”
I argue in this March 2023 Zacks economics monthly…
The world’s auto producers and consumers are in the throes of a profound structural change, one brought to them by top-down government policy.
Government actors are actively spurring a more rapid adoption of electric vehicles. In turn, they are spurring on the latest info tech sector technologies — in chips, in computer software, and in chemical battery-charging.
This is causing a factory floor revolution -- across all of the world’s automakers.
The economic policies I refer to are climate-change incentives. These pushed forward the rapid rise of electric vehicle (EV) production.
In sum, this amounts to a global economic development initiative, to bring about a sustainable world economy.
One not hamstrung by dramatic climate events. One to limit serious urban air pollution.
From the IMF Survey: What are the key ingredients for sustained growth in a country?
Harvard Economist Dani Rodrik: “I think all sustained episodes of growth are underpinned by fundamental structural change.
“Of course, you can get growth spurts because of an improvement in the terms of trade or a sudden burst of capital inflows. But those tend to peter out unless there is the emergence and expansion of new industries, and movement of labor from traditional industries into modern industries. This is the essence of structural change.
“Without these things happening, a country is not likely to achieve long-term growth.”
II. Electric Vehicle (EV) Structural Change -- in the USA Context
On the www.electricforall.org website, I found these U.S. EV incentives.
At the Federal level, they list three top incentives.
1. You may qualify for a credit up to $7,500 under Internal Revenue Code Section 30D if you buy a new, qualified plug-in electric vehicle. The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles purchased from 2023 to 2032.
2. You may qualify for a credit up to $7,500 under Internal Revenue Code Section 30D if you lease a new, qualified plug-in electric vehicle. The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles leased from 2023 to 2032.
3. Beginning January 1, 2023, if you buy a qualified used electric vehicle (EV) or fuel cell vehicle (FCEV) from a licensed dealer for $25,000 or less, you may be eligible for a used clean vehicle tax credit. The credit equals 30% of the sale price up to a maximum credit of $4,000. Conditions apply.
At the California State level, this website lists three additional top incentives.
1. Beneficial State Bank has committed to providing auto loans at an 8% interest rate or lower to participants of the Clean Vehicle Assistance Program.
2. The California Clean Vehicle Rebate Project (CVRP) offers rebates for the purchase or lease of qualified vehicles. Low-income applicants are eligible for higher incentives.
3. The Consumer Assistance Program provides $1,000 to $1,500 to support the retirement of old, polluting vehicles.
On top of that, the primary electric supplier for Southern California, “South California Edison (SCE) is offering its residential customers a $1,000 rebate for pre-owned battery electric vehicles (BEVs) or plug-in hybrid electric vehicles (PHEVs). Eligible vehicles must be listed on the California high occupancy vehicle (HOV) list.
“Please visit SCE's program requirements page to determine whether you are eligible for the Rebate Plus option, which offers $4,000. Conditions apply.”
Finally, the site lists local Central California Community Energy Initiatives (CCCEA).
Rolled together, a medley of Federal, State, Utility and Local initiatives have been a key economic development initiative, driving forward EV production in the USA.
In particular, within the bellwether state of California.
On Feb. 9th, 2023, data released by the State of California shows the Golden State is indeed making substantial progress toward its EV goals.
In 2022, California's electric vehicle market share increased to over 17%, according to the California Energy Commission and the California New Car Dealers Association.
Still, a 17% California EV market share falls woefully short, inside a global market scene...
Warm Regards,
John Blank
Zacks Chief Equity Strategist and Economist