Solons Propose Billions in Tax Incentives for Electric Car Sales


As the President of the United States called for the popularization of electric cars in the latest State of the Union address, two solons have proposed bills that would provide billions in incentives for future car purchasers.

Rep. Sander M. Levin and Sen. Carl M. Levin, both of Michigan, have proposed to double the coverage of the program to $7,500 in incentives to buy plug-in electric vehicles like the popular Chevy Volt and the Nissan Leaf.

Once consumers put their money down for electric cars and more car makers produce them, the new coverage provided include incentives that would eventually total to $19 billion in tax credits spread over the next decade.

According to Rep. Levin, it is a lot of money and if consumers take the credits, it would mean that the program works. This is in line with Obama’s goal setting one million electric vehicles by 2015 in America’s roads.

The incentives are important to achieve the goal as electric vehicles are much more expensive, a great part of it goes to the cost of batteries. The Volt’s SRP is at $41,000 while the Leaf’s SRP is $32,780, a far cry from a regular internal combustion vehicle at $20,000 a pop. The program would boost sales for automakers while the incentives would go to the “early adopters”, often those well-off and well-heeled set.

In the previous version of the bill, the incentive amount of $7,500 was for allotted for the first 250, 000 purchasers and $200,000 for the manufacturer. This bill expands that to allpurchasers, with the manufacturers enjoying $500,000 overall.

Vice President Biden also has gone on campaign stumps pushing for the electric car agenda. He was at a battery plant in Indiana last Wednesday, where he announced the need for greater programs in research and development into electric car technology. He also envisioned a competitive grant program that offer communities up to $10 million to develop the support infrastructure for electric cars in their roadways.

This program in the President’s speech, hopes to break the dependence on foreign oil andreduce greenhouse gases and other pollutants in the environment. Critics though have pointed out that previous programs aimed at reducing dependence on foreign oil by focusing on alternative fuel sources. These programs though still have not been able to create a commercially viable vehicle. By focusing on another fuel technology source such as electricity, the funds and efforts put into the other programs would go to waste.

Another criticism would be the pegged amount of $7,500 as incentives, since they say that the amount is too small to justify the benefit, which is environmental preservation. The current roster of vehicles, such as the Leaf and the Volt, have no tailpipes to spew out exhaust gases. They are powered by rechargeable batteries relying on electricity. Electricity is still being produced by coal fired power plants that produce pollution.

In a recent study conducted by the University of Michigan’s Energy Institute, project lead John deCicco had calculated the amount of greenhouse gas emissions a Toyota Prius produces compared to the Leaf and Volt. He found that the Prius is still the most cost-effective way in the reduction of greenhouse gases compared to pure electricity. When you factor in the pollution from the coal powered plants to produce electricity to charge the Leaf and the Volt, the Prius still is cleaner than the other two.

In response, environmentalists are pushing for the power generators to produce cleaner electricity, which in turn adds on to the environmental viability of the electric cars. This would in turn help the country become safe and independent from other nations wielding the oil card.

As Obama called it, “a Sputnik moment, but on the ground.”