President Obama Proposes $10,000 Electric Vehicle Incentive

By · February 15, 2012

Chevy Volt

Electrified vehicles, including the Chevy Volt, would be eligile for President Obama's proposed $10,000 incentive.

The Obama Administration wants to boost government incentives on electrified vehicles from the current $7,500 to $10,000. The increase is a provision in Obama's proposed $3.8 trillion budget for the fiscal year starting Oct. 1.

Obama's idea is to support a critical emerging clean technology and support blue-collar manufacturing of electric cars in the United States. However, critics were quick to point out that the subsidy would cost taxpayers $100 million each year if it is approved by Congress, based on just 10,000 plug-in autos sold each year.

If approved, vehicles including the Chevrolet Volt, Nissan LEAF, and Ford Focus Electric would qualify for $10,000 in federal incentives.

The proposed hike in the per-vehicle incentive is one method the Obama Administration will use to hit its aspirational goal of 1 million advanced-technology vehicles on US roads by the end of 2015. There's no set timeframe on the possible passage of President Obama's proposed budget, which includes the boosted incentives. The Wall Street Journal and others claim that Obama's budget has little chance of passage. Regardless, the proposal draws a line in the sand declaring that EV tax credits (even at the current $7,500 level) will be defended against Republican attacks.

Comments

· · 2 years ago

If gas goes above $4 a gallon no incentives will be needed.

· Anonymous (not verified) · 2 years ago

Woa!

Kinda surprising, isn't it?

· Anonymous (not verified) · 2 years ago

@ Red Leaf - If gas goes above $4 a gallon? It is only a matter of when.

· · 2 years ago

The only thing holding back widespread adoption of EV's is the lack of public charge stations.

There are so many gas stations that you are never more than a few blocks away from one. The biggest worry people have with an EV is getting stranded with a dead battery.

We need to make it as easy to buy electricity as it is to buy gasoline, only then will we break the oil addiction.

· Anonymous (not verified) · 2 years ago

Why does the Volt qualify for these rebates? It is just truly a hybrid.

· 54mpg (not verified) · 2 years ago

I would think the govt. should spend more money on infrastructure development for the EV industry rather than spending all the money on subsidizing individual cars.

They can pay 100% of the cost of installation of EV charging stations on 100% of nations gas stations. There are 120,000+ gas stations in the US today. To install 2 EV charge stations each on all these gas stations would cost: 120, 000 x $10, 000 = $1.2 billion. How much of this money can the government spend?

· · 2 years ago

@Red Leaf, "If gas goes above $4 a gallon no incentives will be needed."

No way. At $4/gallon there will be some grumbling and fuel-efficient cars will sell a bit better on the margins. But for most people it will just be business as usual and money spent on gas will be squeezed out of the family budget elsewhere.

The problem is a variant of the "boiling frog" effect: each time the prices hit a new high there is a bit of fuss, then drivers become acclimated to the new higher price range and it takes a spike up to even higher prices to get their attention. Gas prices have been in the $3-$4/gallon range for long enough that people have become accustomed to them. It would now take prices in the $5-$6/gallon range to get their attention and get them to seriously consider alternatives such as EVs. IMHO, of course.

You and I both know that a LEAF is a great way to avoid paying higher gas prices, despite the limited range, and that it is great fun to drive. But there is a huge education problem in getting the vast majority of people to consider the EV alternative. And the sheer complexity of the LEAF's electronic systems, timers, and the like, make for a gigantic learning curve for the population, most of whom couldn't even figure out how to program a VCR (remember the flashing clocks fixed at 12:00?).

No, I just don't see it happening anytime soon, $4/gallon gas or not. The range of EVs needs to increase and the complexity needs to drastically decrease.

· · 2 years ago

@ dgpcolorado - We are not living in the VCR age anymore. We are living in the smart phone age now. People will figure it out. They may even enjoy it.

Although admittely all the different manufacturers need to work on making their software more intuitive and more useful. But changing software and user interfaces is easily done. The recent second upgrade for the LEAF is an example of that.

If people have ideas as to how the user interface can be improved, you should send these to Nissan.

Or maybe plugincars.com can do a thread on that now that some people have had some drive time in their EVs.

· · 2 years ago

I read on http://www.greencarreports.com/news/1072981_obama-2012-budget-proposes-h..., well plus he loosely said it in the state of the union, this will be paid for by cutting oil subsidies. Plus this will make up the gap in the California rebate that used to be $5k.

I like it though, no extra cost, oil prices maybe go up more. It's ultimately two rebates in one.

I do have a question though for Leaf owners. Assuming this rebate is still tied to tax burden, did you guys all get the full $7500 back from taxes? Did any body not get $7500 back? I'm just wondering how tough it is to actually quality for the $10k. Can a $60k-$100k home-owning household get it? Or is it like millionaires only? Maybe I should've asked my tax guy. hehe

· · 2 years ago

dgpcolorado + alt-e: I think the 'smartphone' aspect has to be helping these cars on some level. The first people to have HD tvs, bluray, hd DVD, etc will surely feel some pull towards EVs. As for the boiling frog, I think that's right too. I remember when the prices first hit $3 and all the Tonka trucks disappeared. It was bliss. Now that gas is $3.71 at Valero and $3.85, the Tonka's have returned. I think for these drivers there's a base level of competence that is non-existent, so tracing numbers into the past does not occur. They can reconcile a price increase this month, but next month is a new day. Additionally, the price of gas needs to overcome the belief that the car battery needs compete replacement at 100k miles. This probably isn't true as you can replace single cells. However, until people start reaching 100k miles to prove or disprove this, the data will not exist. Either way though, the future looks bright.

· hxp417 (not verified) · 2 years ago

Every little bit helps.

It is still the early adoption era for EVs. It will take decades.

Rome wasn't built in a day.

By the way, $4 gas won't do it all, Prius sales went up very much in 2008 but can't say "explode". Prius is just like the Nissan Leaf minus $10,000 incentive, and it goes half way towards Leaf's 100 mpg (went up from 25 mpg to 50 mpg, I am calling this "doubling" as halfway).

In Europe, gas is $8/gallon, EVs are still coming up gradually.

· · 2 years ago

@alt-e, "We are not living in the VCR age anymore. We are living in the smart phone age now. People will figure it out. They may even enjoy it."

Some people will figure it out. There are plenty of smart, tech savvy people around. But "Joe Sixpack"? Get real.

My sense is that the EV community is composed of very bright early adopter types who assume that everyone must be able to appreciate the things they do but don't realize that most people are pretty ignorant or just plain stupid. Good luck getting them to learn how to program the timers on a LEAF, never mind the 80% versus 100% charge stuff. Not everyone uses smart phones. The vast majority of people don't use smart phones, the fuss by the tech crowd over the latest gadgets from Apple notwithstanding.

If you want to make the argument that there are millions of people who are brighter and more tech savvy than average, fine; that's still a lot of potential customers. But for EVs to go mainstream they are going to have to be a whole lot simpler to use.

· · 2 years ago

@Anonymous "Why does the Volt qualify for these rebates? It is just truly a hybrid."

I used gas in my Volt last week to go on a roadtrip. I haven't used a drop of gasoline since then. How is that "just truly a hybrid"?

· TjKinMT (not verified) · 2 years ago

Will other plugin hybrids like the C Max Energy qualify for the incentive? Is it a tax credit or Is it taken off at the time of the purchase?

· · 2 years ago

dgpcolorado: Is it too early to feel sorry for Mr. Six Pack?

I think Mr. Six pack might like the Volt. I mean, it's got the partial look of aggression on the front. The Leaf's appearance is too friendly, for Mr. Six Pack. It's almost got that Austin-Healey Sprite look about it, in my opinion. Other than that there's the price. Does senor Six Pack have the cash or combination of tax qualifications to get either car?

· · 2 years ago

@ TjKinMT - It is a tax credit based on the amount of energy storage capability in the battery pack. 16kWhrs qualifies for the maximum credit of $7,500. The Volt has exactly that amount of capacity and so gets the max credit. The C-Max will have a smaller pack and so will get a smaller credit. I don't think they have yet announced the exact capacity of the battery.

· · 2 years ago

I don't like this idea - not that it has any legs. The senate hasn't passed a budget in 3 years.

I prefer that the govt money goes to setting up infrastructure. We can have a fast charging station every 15 miles of US for less than what we used to pay for Ethanol subsidy every year !

The $7.5k is a good amount. We just need better infrastructure now.

· Anonymous (not verified) · 2 years ago

Ron Paul 2012

· Brett Owen (not verified) · 2 years ago

EVNOW: What if they stuck 240v chargers at state campground sites? Well, or not. I guess the environmental impact would have to be measured.

· · 2 years ago

>> I prefer that the govt money goes to setting up infrastructure. We can have a fast charging station every 15 miles of US for less than what we used to pay for Ethanol subsidy every year ! <<

Hell, even at a paltry $7500 per vehicle, we haven't even yet spent as much public money on EVs, than we spend every year in gasoline "subsidies."

How about we make this revenue neutral? Remove all oil/gasoline subsidies (at least for transportation) and dump all that into EV purchase or infrastructure.

· · 2 years ago

Well going from a $7,500 to a $10,000 tax credit is essentially a tax cut. The Republicans like them some tax cuts. But, on the other hand, Republicans hates them some electric cars and anything President Obama is in favor of. So what's a Republican to do??? Grover Norquist, what say you? Ah, $10K it is!

· EMF (not verified) · 2 years ago

*If* gas goes above $4??
It already is in rural California!

I think it will take $10/gal, European-level prices, to effect the change needed.
Sometime before 2020 for sure (even inflation adjusted). Much sooner if Israel (and/or US) bomb Iranian nuclear facilities this summer...

· Anonymous (not verified) · 2 years ago

incentives are great if you for the consumers but for this to really work they would have to install charging systems throughout the u.s that could be expensive the only way to get trough that is to have local gas stations install charging systems there but the oil who owned guite a few gas stations probably won't go for it why cut into business and besides batteries take awhile to charge the only way is a battery swap program for it to be conveniant for the consumer and if to expensive consumer will stay away plus the inconveniance of it all i'd would love to see alternative to gas right now it be a big price tag

· · 2 years ago

Anonymous: I agree "just when". I was thinking in terms of this year.
kjd: Chargers will come over the next 5 years but the technology will probably change a lot. Hard to invest now when you know changes are coming. Kind of like cell phones. Also much easier to put in a charging station then a gas station. Patience; it will happen.
Anonymous: Volt = politics but Volt does go 30 miles before ICE kicks in.
54mph: Goverment $15 trillion in debt, time to stop spending PERIOD! Before we look like Greece.

· · 2 years ago

One of my first memories of global politics was the Iran hostage crisis and OPEC’s manipulation of the market. This lead to the gas rationing of the late 70’s in my home state. We could only get gas on odd or even days of the week based on the last digit of one’s license plate. The price of gas tripled and one would wait in line 2 plus hours for a fill up. Some people would run out of gas waiting for gas. President Carter laid out what we should do. I will not get into that because it is all over youtube now.

Carter lost to a second rate actor and when things went back to normal everyone was happy including myself. This is all because of one fact. Americans second least favorite thing to do is having to change their lifestyles. The first is being told that they have to by someone else. In that regards it is truly a selfish society. This is why we are culturally behind Europe by 60 years give or take a decade. I site healthcare, slavery, divorce, and tank less water heaters as examples.

The price of gas will have nothing to do with adaptation of EV’s at least not as much as if one was used in a James Bond flick or if there was an EV version of the General Lee out racing cop cars.

Unfortunately, I don't see this budget being approved because the President in many ways stuck in the same position as President Carter having to state what most be done yet we are not ready to listen.

· · 2 years ago

Chris: I regrettably agree there. There's quite a bit of stubbornness. Things like the news of that GE order for 25,000 Volts are bright news though. Also, look at the adoption of CFL lights. After ten years now, those are like the only lights you see. Hybrids too, not everyone has one, but there are sure a lot of them.

· · 2 years ago

For most of us actually driving EV's or ERev's (and PHEV's soon), the infrastructure needed is sitting in our garages or has been prearranged for at work. I have no need to have public charging stations when my average daily usage is 30 miles. I hear the average daily Leaf mileage is 36 or so. Why is infrastructure a sticking point?

For $300 I upgraded to my Leaf's stock EVSE charging cable to charge in my garage, plugged into a $16.00 Lowe's 240VAC L6-20 outlet I installed in 5 minutes in my spare time. It's all very simple and I don't have a smart phone and I don't care to learn how to program my VCR. We're gonna look back on this period and wonder what all the fuss was about.

· · 2 years ago

Make it $15K but with a cap, only valid for cars selling for less than $40K. We need EVs available for less than $25K.

· Norbert (not verified) · 2 years ago

@Laurent: "Make it $15K but with a cap, only valid for cars selling for less than $40K. We need EVs available for less than $25K."

Battery prices need to go down *first*. At least until then, cars with larger batteries (like Tesla's) should get *higher* credits. Leaf and Volt don't make profit as far as we know. They don't have a valid business model. Programs/companies like Tesla need to make profit.

· · 2 years ago

I never worked out how to tune my VCR. I don't have a clue how to work my smart phone. When I get an electric car I won't have a clue how to work the high tech stuff in that either. Fortunately I had the sense to have a couple of kids and I know how to dial their numbers on my phone. Problem solved.

· · 2 years ago

Here is an idea. Make it $8500 and give each state $1500 (for a total of $10,000) to cover 15 years of $100/year tax.

· · 2 years ago

I like the idea of increasing the incentive ... but not sure it would make a big difference for a lot of buyers because the price is still too high. There are a lot of people who have never spent more than $15K for a vehicle (me). For someone like me to spend $25-30k (after the credit) for a car is just way too much more to amortize, insure, and worry about.

But I really want an EV, so I'm thinking about an "i" and test drove a Nissan Leaf for the second time today. The Leaf was smooth, quiet, responsive ... but kind of bland. I was tired of seeing the screen display and had to teach the salesman how to turn it off (press and hold the brightness button). I am not afraid of technology (I work in IT), but find it overdone in most new vehicles . Though it's not complicated to drive, I do agree with dgpcolorado that EVs are too complicated for the average person (I know, because I have to help them with software problems). Plus, most people aren't going to value that extra complexity by paying an extra $20K for the car (a 2012 Nissan Versa costs ca. $15K). A $10K incentive makes it better, but if you're counting dollars, you're still having to pay higher insurance (I need only liability on my current vehicles), higher sales tax, for some charging infrastructure, and perhaps car rentals for the times you can't drive electric. Even if you love the environment, hate our stupid foreign wars for oil, and want to encourage a better future - it just isn't possible for many people.

If gasoline prices go up to european levels, drivers will probably just drive less (as happened in 2005 when we had the big spike in prices). A few will be spurred to do an EV conversion perhaps or if there becomes a used EV market (with cheaper battery packs), that may well become a viable transportation alternative for that demographic. I'm hoping the 5-10 year prediction for EV prices to come down actually happens this time around (instead of it NOT happening when such predictions were made back in 2001 or so).

· Anonymous (not verified) · 2 years ago

Bla bla bla... First get rid of the lobiest.... Hiegher Tax on gas guzzlers... Invest in free energy...
We don't have the recourses or the money to go electric cars... We just can't.. Be realistic...
Only that 1% can truly afford it..

· · 2 years ago

Yes, there are people who have never spent more than $15k for a car. There are people who cannot afford $25k for a car. But the vast majority of American car buyers pay those prices. THAT is the norm, not the "here's my situation that's probably common for everybody else."

The simple fact is that the average price of a purchased new vehicle in the USA is roughly the same as the price of the LEAF. The average car is NOT being purchased by the 1%'ers.

· · 2 years ago

If the $10,000 incentive is approved, would it be for all EV's sold in 2012, or only those sold after the budget is approved. If a person buys an EV today, is it assumed the $7500 incentive is still in place? What if a person buys a 2011 model in early 2012?

· Anonymous (not verified) · 2 years ago

I'm in for a $10K credit. Tesla or the Volt, both are great cars. Both cars, American made, American FUELED.

· Anonymous (not verified) · 2 years ago

"For most of us actually driving EV's or ERev's (and PHEV's soon), the infrastructure needed is sitting in our garages or has been prearranged for at work. I have no need to have public charging stations when my average daily usage is 30 miles. I hear the average daily Leaf mileage is 36 or so. Why is infrastructure a sticking point?"

Are you kidding? I drive 45 round trip and that is just to work, nevermind the afterschool activities. How long does it take to charge? Not fast enough for my schedule. How fast do these cars go? What’s is the acceleration? I need pick up to get on and off the turnpike exits, especially when you’re merging with 18 wheelers. How big are these cars? What can I fit into them? I drive a full size V8 SUV, it’s paid off and I will continue to drive it until it’s on it’s last legs. I don’t know about the rest of you, but in the good ol garden state (NJ) full coverage is expensive, which is another thing to consider with a new car.

Here is what would make me want to buy an EV:
• Safety, and a sturdy feeling (they all seem so damn plasticy and cheap-as if they could fall apart at the slightest vibration)
• Lasting charge at least 100 miles
• IF the battery’s charge is 50 miles or less, then charging stations at EVERY gas station
• Quick pick up
• Bigger interior
• Able to haul things
• No more maintenance than the gas cars
• $35K or less

Until then, it’s more economical for me to use my gas guzzler. Even if the prices go over $5/gallon, I’ll just cut back on shopping for clothes/shoes/hair products/pedicures/etc. - assuming most people will do the same (less frivolous spending). You can see where this will lead to right? Less spending=less money into the economy, a continuous downward spiral. Really it’s not that people aren’t educated about these cars, it’s that there’s not much of an incentive for them to purchase one, at least at this time.

· · 2 years ago

Anonymous (second one), It seems clear that you have never driven an EV or you wouldn't ask questions like "How fast do these cars go? What’s is the acceleration?" The LEAF has quite good acceleration—the biggest surprise for me was how effortlessly the car accelerates up the steep hills where I live—and the top speed is ~94 mph. You might want to test drive one just to see for yourself. And electric cars should require vastly less maintenance than very complicated conventional ICE cars (think about the enormous number of parts that your car has that an EV does not have).

Nevertheless, if you are looking for a large utility vehicle, it may be some time before there are electric cars or trucks in that category, although they are coming. The current EVs work best as commuter cars, which covers the vast majority of mileage of most households. But no car will be all things to all people. And your V8 SUV is bigger and less economical than many people want or need. If it works for you, fine. But don't assume that if the current EVs don't work for you they aren't good for anybody. My EV gets the vast majority of my driving mileage and my ICE car, a 4WD SUV (Jeep Cherokee), is used only for long trips or difficult driving conditions (heavy snow or off-road).

Bear in mind that the more people who drive EVs, the more gas/diesel is left for those who want or need to drive regular cars. And that may help keep prices from going even higher. So, if the current EVs don't fit your needs you might want to encourage others to drive them to keep gas prices down.

· · 2 years ago

@Anonymous - If you need a big car to haul around kids and you often go around 100 miles a day and if you need something in the $35k range, current battery technology would be too expensive, like the Model X from Tesla. Therefore the best plug-in vehicle for you would be a plug-in hybrid cross-over such as the Mitsubishi one coming out in the near future or the Ford C-Max Energi, although the C-Max may be a little small for you. You would have to check it out to see. I think the Mitsubishi will be a little larger. But either way there are a number of plug-in cross-overs and SUVs that will be coming out in the next couple of years.

As batteries improve there will be pure EVs for someone with your needs, but right now the only thing being worked on is the X and it will be too pricey even when it comes out in a couple years.

But a plug-in cross-over or SUV could take quite a bit out of your monthly gas bill. Especially if you get one that has a high post battery mpg.

· Anonymous (not verified) · 2 years ago

Why not just let the government give you $10,000 of some other taxpayers money so you can buy gas? At 34 miles per gallon and $4.00 per gallon, just think how far you can drive on my money!

· · 2 years ago

@ Anonymous -

The flaw in your argument is that we aren't trying to pay people to drive lots of gasoline miles. We're trying to convince people that they don't need to use gas to drive the miles they already are driving.

Surprisingly, it is NOT all about the money. It is choosing to do things the least damaging way. We already subsidize gasoline use way more than we've subsidized EVs. Go figure.

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