Obama Administration's Proposed Budget Will Reportedly Hike EV Subsidy to $10,000, Change From Tax Credit to Rebate

This seems to have gone under the radar of the autoblogosphere but according to the conservative Daily Caller, (and confirmed by White House economic chief Gene Sperling) President Obama’s proposed 2013 (2012 fiscal year) federal budget will include a provision to increase the tax credit on Chevy Volts, Nissan Leafs and any other new-technology vehicles including those powered by natural gas to $10,000.The current subsidy is $7,500 per car.

In a White House briefing yesterday, Sperling is quoted as saying, “We give consumers the incentive to buy these cars,” and added that the credit would be $10,000 per auto. The purpose of that increased tax credit is to meet Pres. Obama’s goal of having one million “advanced technology vehicles” on the road by 2015. Though the proposed budget (PDF) doesn’t seem to specifically mention the $10,000 figure, the document repeatedly references “investing” $588 million in funding for the new vehicle technologies through the Department of Energy. Not mentioned by the Daily Caller, and perhaps more significant, is the fact that the president’s FY2012 budget would also change the EV/new-tech subsidy from a tax credit to a rebate available to all consumers at the point of purchase. The article in the Daily Caller points out that the tax credit has been criticized as benefiting primarily affluent people. Market research shows that Chevy Volt buyers are among GM’s wealthiest customers, earning about $170,000 a year. Changing to a rebate on the hood of the car might make the car more appealing to less affluent consumers without a heavy income tax burden.

Excerpts from the proposed budget are below:

Through a range of programs and tax incentives, this Budget supports my goals of the United States becoming the first country to have one million electric vehicles on the road by 2015

Specifically, the Budget proposes to: transform the existing $7,500 tax credit for electric vehicles into a rebate that will be available to all consumers immediately at the point of sale

Advance innovative technologies through new R&D investments, building on Recovery Act investments, by investing $588 million for vehicle technologies at DOE—an increase of 80 percent

Helps reach the goal of one million advanced technology vehicles on the road by 2015 through more than $580 million to assist in research and development, a competitive grant program to support deployment in communities across the country, and enhancements to the existing electric vehicle tax incentive

Helps Put One Million Advanced Technology Vehicles on the Road by 2015. To reach this goal and become the first in the world to do so, the Budget proposes new efforts to support electric vehicle manufacturing and adoption in the United States. The Budget transforms the existing $7,500 tax credit for electric vehicles into a rebate that will be available to all consumers immediately at the point of sale, and advances innovative technologies through new R&D investments, building on the Recovery Act investments. In addition, the Budget proposes an investment of $588 million for vehicle technologies—an increase of 88 percent above current funding levels, including a new effort to reward communities that invest in electric vehicles and infrastructure and remove regulatory barriers through a $200 million grant program, modeled after the Race to the Top program.

Ronnie Schreiber edits Cars In Depth, a realistic perspective on cars & car culture and the original 3D car site. If you found this post worthwhile, you can dig deeper at Cars In Depth. If the 3D thing freaks you out, don’t worry, all the photo and video players in use at the site have mono options. Thanks – RJS