The Obama administration wants to turn the $7,500 federal tax credit for electric vehicles into a cash rebate that will reduce the vehicle price at the time of purchase.
It’s one of three new initiatives supporting the administration’s goal of putting 1 million advanced technology vehicles on the road by 2015.
Combined, the three initiatives expand funding for vehicle technologies by almost 90% to nearly $590 million. The three initiatives are:
Making electric vehicles more affordable: A transformation of the existing $7,500 tax credit into a rebate would give consumers the ability to receive this benefit at the point of sale, similar to "Cash for Clunkers". The current individual credit will be reformed into a tax credit claimable by dealers or financers with clear transparency requirements to ensure the benefit of the credit is passed on to consumers.
Advancing innovative vehicle and battery technologies through increased R&D: This year’s Budget will significantly broaden R&D investments in technologies like batteries and electric drives–including an over 30% increase in support for vehicle technology R&D and a new Energy Innovation Hub devoted to improving batteries and energy storage for vehicles and beyond.
Rewarding communities for developing comprehensive electric vehicle-friendly infrastructure: The Department of Energy is beginning a competitive program to help communities across the country become early adopters of electric vehicles through regulatory streamlining, infrastructure investments, vehicle fleet conversions, deployment of EV incentives (e.g., parking, HOV access) partnerships with major employers/retailers, and workforce training. The FY 2012 Budget will expand this initiative so that that up to 30 communities across the country would receive grants of up to $10 million each on the basis of their ability to demonstrate concrete reforms and use the funds to help catalyze electric vehicle deployment.
Vice President Joe Biden announced the details this week, while visiting U.S. battery company Ener1 (Nasdaq: HEV).
"We’re not just creating new jobs-but sparking whole new industries that will ensure our competitiveness for decades to come-industries like electric vehicle manufacturing," he said.
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