We’re going to focus on that proposal, because it would dramatically change the dynamic for electric vehicles. Right now, the $7,500 tax rebate (enacted by George W. Bush) means that buyers pay the full price of a vehicle like the Chevy Volt up front. Come tax time, they can deduct up to $7,500 from their taxable income.
The problem with this rebate is that it forces would-be EV buyers to come up with the cash up front. Obama’s proposal would turn the tax credit into a $10,000 rebate, which comes off the price of the car at the point of sale. So instead of making payments on a $41,000 Volt, buyers would make payments on a $31,000 Volt. For the Nissan LEAF, the price would come down to about $26,000; the Mitsubishi i would squeek in at under $20,000.
I’m not sure this rebate stands a chance of getting through a divided Congress, but it would be a huge boon to the electric vehicle business. Right now there is legitimate criticism that the tax credit favors wealthy buyers who can afford higher payments for a lower tax rate. It is said that the income of the average Chevy Volt buyer is about $170,000, which makes sense as a lot of celebrities like Jay Leno flocked to the Volt when it first came out. This rebate would make the payments easier to swallow for the average American.
I for one would run out and buy a Nissan LEAF tomorrow if this proposal actually gets passed. How could I not? For about $300 a month, I could have an all-electric car. That’s almost my entire monthly gas tab between me and my girlfriend.
Would a $10,000 rebate change your mind when it comes to buy an electric car?