$19 Billion Tax Incentive Program Conceived to Reach 1 Million Electric Car Goal by 2015

Michael Cerkas's picture

It took but a day for two politicians from Michigan to create an enhanced tax incentive proposal they say will support the president’s stated goal (State of the Union Address) to have one million electric cars on the road by 2015.

Representative Sander M Levin and Senator Carl M Levin, Michigan democrats, have proposed to broaden by two-fold a program to return $7,500 in tax incentives to people that purchase plug-in electric vehicles. Examples of electric vehicles on the market now include the Nissan Leaf and the Chevrolet Volt. The new proposal, if fully leveraged, would equate to nearly $19 billion in tax credits to consumers over the next ten-year timeframe.

The original incentive program limited the $7,500 tax credit to the first 250,000 vehicles. The stimulus bill exptended that boundary to 200.000 per vehicle manufacturer. The proposed legislation would further lift the limit to 500,000 vehicles per manufacturer.

The Obama Administration announced today that it intends to boost research and development for electric vehicles to augment competition, offering up nearly $10 million per community for 30 communities to develop the required infrastructure of electric charging stations for the electric vehicles.

Proponents contend that electric cars will collectively reduce America’s dependence on foreign oil and improve the environment by reducing greenhouse gases.

Equally, opponents state the combination of increased costs to manufacture electric vehicles, diluted focus on existing clean energy technologies (hydrogen and bio-fuels), the cost of the subsidy itself ($7,500 per vehicle) and the environmental footprint of the energy required to charge the batteries of the electric vehicles more than offset the benefit of cleaner air.

One thing for certain about the future of the electric vehicle; is that it has energized and polarized the dialogue about it.

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