White House Pushes For a $7,500 Instant Cash Rebate Towards Electric Car Purchases

By · February 09, 2011

President Obama delivers the 2011 State of the Union address, in which he called for one million electric cars on U.S. roads by 2015.

A day after U.S. Senator Debbie Stabenow (D-Mich.) reintroduced a bill to turn the existing $7,500 federal electric car purchase tax credit into an instant rebate—and a couple of weeks after President Obama called for a renewed goal of getting one million electric cars on the road by 2015—the Obama administration is putting its full weight behind the instant rebate proposal, saying it's the most effective way to make electric cars more accessible.

According to Automotive News, David Sandalow, the U.S. Department of Energy Assistant Secretary, said, "The current credit is going to be reformed so it will be claimable by dealers or others and then with clear requirements that the benefit of the credit is to be passed along to the consumers. It is more effective as an incentive like that than to provide it as a credit that has to be applied against income tax returns filed at a later time.”

That sounds like pretty confident talk considering that the proposal would have to pass through a divided congress before it becomes law. Last year Senator Stabenow introduced a bill that would have converted the tax rebate to an instant rebate, but in the craziness that was the lame duck session, the bill never saw the light of day. Now that the spotlight is back on Obama's one million EV goal, Stabenow has taken up the charge again, reintroducing the bill.

The way the law currently stands, purchasers of electric cars are eligible for a $7,500 federal tax credit but have to wait up to a year or more—whenever they file their taxes—before they get any money back... and even then they may not qualify for the entire amount. An instant rebate would act as a down payment towards that purchase. The only way the current $7,500 credit can be used "instantly" is if the electric car is leased. In that case the manufacturer can claim the tax credit at the end of the year and pass the savings on to the customer at the time of the sale.

Not only would this change in law reduce the barriers toward owning an electric car and speed up their adoption, it would also have the effect of dramatically cutting back on fraud and the federal and state resources spent dealing with it. As it turns out, already the IRS has seen more then $33 million of fraudulent claims for the $7,500 electric car tax credit—some of them even for the purchase of Hummers.

Source: Automotive News (subs. req'd)


· · 7 years ago

Nick, I live in Wisconsin. Who here do I have to contact to get them to vote for this bill? Way to keep this idea active here on the site. Thank you.

· · 7 years ago

Tony, way to be proactive! Your senators are Herb Kohl and Ron Johnson:


Everybody else can look up their Senators at that link too... it only takes a minute to make the call.

While you're at it you can do a preemptive strike on your Representatives as well:


· Samie (not verified) · 7 years ago

Personally I would rather see a tax rebate for auto manufactures instead of consumers (possibly a reduction in emission taxes for producers). Why? I think sometimes federal rebates to consumers create less producer based incentives & a higher real selling price compared to EVs without a subsidy.

Don't get me wrong, I love the idea of a stable $7,500 instant rebate but I wonder if this is the right way to encourage market activity. Ten years & 2-3 percent market share doesn't cut it for me & any federal incentive needs to always push newer EV technologies with encouragement towards innovation.

If a instant consumer rebate is what happens, we need to make sure not to support a one size fits all plan. Vehicle owners who own the car & battery technology should be rewarded the incentive. Additionally, we need to see rebates that raise the bar on technology through a step up approach.

· · 7 years ago

Maybe we should deposit the money into the company CEO's offshore bank account directly and let trickle down economy do it's magic?

If people are buying the cars then manufacturers will sell them and eventually make a profit on them. If American car manufacturers are not willing to do this then foreign manufacturers will. Either way America will benefit through reduced dependence on foreign oil and less air pollution causing all sorts of expensive medical problems.

A $7500 instant rebate is a great idea.

· JKD (not verified) · 7 years ago

The freaks from GA and its neighbors will be too busy "repealing" the health care bill rather than doing something good, forward-looking, and useful for the consumers :-(

· Samie (not verified) · 7 years ago

Not sure what you can say about the comments below mine. All I can say think independently & not with emotions.

Here is a thought ask questions.
Example does a plug-in Prius get the same rebate as a Leaf? Can you get the rebate if you lease the vehicle or say battery? Do we offer incentives for batteries that are not Lithium? How can we make sure car companies are offering market based incentives & innovation beyond government support?

In case people live in a bubble, we face huge budget cuts all I ask is for folks to support EV legislation that uses government funds efficiently & encourages markets to innovate.

New to EVs? Start here

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  2. Incentives for Plug-in Hybrids and Electric Cars
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