President Obama in the budget submitted to Congress proposes to increase supporting electric vehicles by changing the $7500 tax credit (based on income) into a $10,000 instant rebate at the time of sale. Electric car sales in January slowed which some contend could be related to lower gas prices. Automakers have been cutting the sticker prices of electric cars by as much as $4,000 on some electric plug-in cars.
One of the many stumbling blocks of buying and electric car is the price. Currently, the federal government gives up to a $7500 tax credit. However the price of a plug-in electric car could be over $10,000 more.
President Obama, in 2011 hoped to have 1 million electric cars on the road by 2015 with $2.4 billion in federal grants for lithium-ion production. Currently, there are only about 286 thousand plug-in EVs on the road in the United States and equate to a small percentage of cars sold.
The new proposal would be on top of the additional State grants such the 20% tax credit ($5,000 max) in Georgia, California’s $2,500 rebate, Pennsylvania’s $3,50), and Colorado support of up to $6,000. Georgia’s credit enabled the state to post the highest rate of EV adoption in the first half of 2014.
The proposed budget would have to pass through Congress where similar initiates have failed in the past. The White House also proposed to increase National Highway Traffic Safety Administration’s defect investigation budget to $31.3 million to help with recalls.
With gas prices at $2 it is still cheaper to charge an electric car at about 55% of the cost.