Feb 16, 2012
Chris Salamone

Obama Budget Throws Giant EV Bone

Say what you will about our President, but the man knows his logical reasoning. The big problem with EV sales is that only America’s financial elite can afford to go electric and take advantage of the $7,500 tax credit. In point of fact, GM recently came out and admitted that Chevy Volt buyers are some of the company’s most wealthy customers, averaging about $170,000 in income per year.  And since Obama has a goal of having one million “advanced technology vehicles” on the road by 2015, clearly the President cannot rely on an exclusive class of citizenry.

In an effort to make electric vehicles more attainable for your average Joe, President Obama’s federal budget will include a provision to change the EV tax incentive from a credit to a rebate and increase the dollar amount from $7,500 to $10,000.

While a credit can be very useful for high income earners, as a method of deducting total taxable income, a rebate will function as an immediate incentive for all consumers to go electric. Thus, $10,000 would be chopped off that Chevy Volt’s sticker price at the point of purchase, not during next year’s tax season as a deduction. Suddenly EVs could look at lot more affordable.

In addition to fundamentally changing the EV incentive program, “the budget proposes an investment of $588 million for vehicle technologies – an increase of 88 percent above current funding levels, including new effort to reward communities that invest in electric vehicles and infrastructure and remove regulatory barriers through a $200 million grant program.”

Sure, the FY 2012 budget is quite a mouthful of politicking and almost no one expects the document to pass through both houses. But Obama’s FY 2012 budget is more about spreading ideas than assuming control of the legislature’s spending power. Most Americans, democrat or republican, can agree that electric vehicles will have a place in our transportation network of the future. The current EV tax credit of $7,500 is one way to get there, albeit very slowly.

If the government really wants to incentivize EVs, then Obama’s plan for an immediate rebate looks like a much faster way to allow average Americans to buy in. The day a Nissan Leaf or Chevy Volt costs less to purchase than a similarly equipped Prius will be the day EVs go mainstream. If we learned anything from Toyota’s hybrid miracle seller, it’s that car buyers are willing to try something new…for the right price.

Source : The Truth About Cars

1 Comment

  • I think this is one good thing Obama is going to do, i think alot more people will be willing to buy a EV if this passes and not worry about spending a lot of money on a car.