When President Obama’s State of the Union address rolled around recently, some pointed out with glee that his original goal of putting one million electric vehicles on American roads by 2015 has fallen short, like about 700,000 units short, give or take. Projections state that by the end of 2015 400,000 EVs will be operating in the country, which is still a far cry from the target. Now the administration is floating an idea that could potentially help spur electric car sales and make up for lost ground.
Obama’s plan involves upping the federal tax incentives for purchasing a new electric vehicle from $7,500 (the current amount) to $10,000. Instead of keeping the incentive as a credit, the plan also involves converting it to a point-of-sale rebate.
The proposal could help sway a number of car shoppers who are on the fence about getting an electric vehicle. For example, it would knock the base MSRP of a 2015 Chevrolet Volt down to $25,170. For people who might have a loan prequalification cap of $30,000 that would put the Volt within reach, while right now it would be too expensive for them to purchase, even though after the credit it would be well within their means. Even more compelling is the 2015 Nissan Leaf, with the rebate making the MSRP for a stripped-down model just $19,010.
This isn’t the first time that the Obama Administration has pushed for the $10,000 incentive as well as the point-of-sale rebate. Like past times, the proposal is dead in the water. This time around, the plan would include other alternative fuel vehicles like compressed natural gas models, if it takes hold.
Why are electric vehicles so much more expensive than the equivalent internal combustion models? Automotive industry experts say it’s because the cars aren’t made in mass numbers like other vehicles. Automakers have held off on kicking out EVs in mass numbers because of the limited number of public chargers in many areas and the public’s fear of the lower driving range when compared to internal combustion cars.