By on February 5, 2015

2016 Chevrolet Volt

Is the $7,500 federal tax incentive not enough to consider owning a new green machine? If President Obama has his way, that figure could climb to $10,000.

The Detroit News says the increased incentive for purchasing an EV or PHEV — part of Obama’s FY 2016 budget — is not only meant to make ownership of such vehicles more alluring, but would be applied as an immediate rebate at the time of purchase. The new incentive would also bring other green vehicles into the fold, such as CNG vehicles.

Other proposals in the budget include a three-fold increase in funding for the National Highway Traffic Safety Administration, and a one-time corporate foreign earnings tax to help fund road and other infrastructure projects over the next six years.

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89 Comments on “Federal EV, PHEV Tax Incentive May Increase To $10K...”


  • avatar
    Superdessucke

    He’s doleing out the tax money like it’s candy! Take that conservatives. Can I attach to the teet in a high performance EV like a Tesla X modified by Saleen? $10k is nice but at $152k I need more incentive. Any other corporations or rich people we can tax?

    • 0 avatar
      highdesertcat

      You don’t have to be rich to feel the impact of this redistribution of America’s wealth. If you’re working and/or paying taxes, you’re supporting the reallocation of your ‘blood, sweat and tears’ money from you to the freeloaders and non-producers of America.

      If you still HAVE to work, you’re stuck dude. Pay up and learn to love it.

      This is what America voted for, not once, but twice. Elections have consequences. This is exactly what America deserves. More freeloaders and welfare recipients.

      And don’t forget, we’ve got O*am*’s war to pay for now. All this BS about ending the wars in Iraq and Afghanistan! Men and materiele are deploying for the Middle East every day. So much for the peaceniks.

      I think EVs should be available to anyone who wants to buy one. I could see where they could be handy for some people driving less than 40 miles a day. Just not with a tax-payer subsidy.

    • 0 avatar
      carve

      Handing it out? This is just taking $10,000 less from you. You still have to earn the $10,000 yourself. If you’re not paying at least $10k in federal taxes, you don’t get the $10k in savings.

      • 0 avatar
        Sgt Beavis

        Actually Carve, a Tax credit does pay you money, even if you didn’t owe that $10k to begin with.

        Not only that, but Obama’s proposal would make it so you don’t have to wait until your taxes are filed to get the money. Instead it is applied as an immediate rebate on the new car purchase.

        That said, I don’t see why anyone is jawing about this anyways. Last I checked, the Congress still has to pass any proposal he makes and right now they aren’t into passing much of anything he wants.

  • avatar
    Toad

    Is this the government admitting that electric cars a are such a bad idea that they need to throw even more money at you to make an otherwise poor decision?

    Most electric cars are second or third vehicles for relatively wealthy urbanites; are these the people that we really need to be subsidizing?

    • 0 avatar
      S2k Chris

      “Is this the government admitting that electric cars a are such a bad idea that they need to throw even more money at you to make an otherwise poor decision?”

      No. This is the government wanting to speed up the rate of adoption which will drive prices down. My first cell phone back in 1996 or so cost like $40/mo and I paid $.75/minute for calls, because the subscriber base was small and telecoms were still trying to pay down the huge initial investment in their networks. Over time, as cell phone became ubiquitous, network investment was spread over a MUCH larger pool, tech got cheaper, etc, and the service cost less. Same idea here. If it costs $1B in R&D to develop an electric car, and you have to spread that cost over 1000 units, that’s a frickin’ expensive car. If government incentives means you spread that cost over 10,000 units, you just got a magnitude of order cheaper. Eventually, adoption has spread to the point where you don’t need government incentives any more. But in the short term, they’re trying to push the natural adoption rate up. Of all the things the govs blow money on, this is hardly the worst.

      • 0 avatar
        CarnotCycle

        Computer tech – in your cellphone, in your laptop, wherever – got cheaper because of Moore’s Law. Extrapolating that to battery-powered automobiles is silly.

        If one loses $500 on every widget sold, trying to make it up on volume is Rick Wagoner GM-strategery.

        • 0 avatar
          highdesertcat

          It worked for Red Ink Rick and then America’s taxpayers ponied up and saved the day when GM died.

          No matter how you look at it, it was a brilliant strategy for impending failure and resurrection.

          And the unions knew up front they would continue their lavish lifestyles, wages and benefits, at taxpayer expense, if they could only put their candidate in office. And they did!.

          Just like the unions who are now striking Big Oil know that Americans will pay for their outrageous demands through higher gasoline prices.

          Who didn’t see that coming?

    • 0 avatar
      heavy handle

      “Most electric cars are second or third vehicles for relatively wealthy urbanites”

      That may be, but let’s not forget that the average American households owns more than two cars. There’s nothing unusual about that.
      Logically, as electric cars become more common, there will be nothing unusual about an average American household owning one.

      • 0 avatar
        S2k Chris

        Yup. Most families I know own two cars, one is a little bigger and nicer and is used for road trips, the other is smaller and less expensive and is basically only used for commuting and driving around town. I bet most families could, money aside, replace that second car with an electric and not ever notice a tangible difference in capability. How much gas and $$$ would that save us (once EVs reach price parity with gas vehicles)?

        • 0 avatar
          bball40dtw

          Now that I’ll be driving less for work, I am seriously considering an EV. The Focus Electric is leasing out for well under $300 a month with $0 down and 12K miles/year where I live.

        • 0 avatar

          I agree. It’s the second car, only meant for short to medium distance driving (commuting, running errands, taking kids to school) we are talking here. That this so-called 2nd car may well turn out to be the preferred car of choice, because of lower running cost, is something Detroit should be aware of. It will definitely affect sales.

          • 0 avatar
            KixStart

            The second or even the third car… Many families here in Suburgatory have more than two cars. An inexpensive but safe EV would make a lot of sense for a lot of people.

            However, at present, the Leaf is still several $K more than a new Corolla or Fit – and much more than a used one. Costs have a ways to go.

  • avatar
    DeadWeight

    The federal government should pay for 85% of the cost of a pure EV (any one that any consumer wishes to purchase) and 65% of a certified PHEV (using California’s certification).

    It is good economics, good for the auto industry, good for the environment, good for manufacturers/dealerships of such vehicles & their xomponents, good for alternative energy producers and the cost of this program can be simply be rolled up into the budget as an expenditure to be recaptured in some ambiguous way in the distant future.

    • 0 avatar
      jpolicke

      Why only 85%? Why stop there? If it’s that good for all concerned, why not pay for the car in full, install high current chargers in the owner’s home, build him a new garage if he needs it, and throw in a family pass to Disney to give him somewhere to drive it.

      It’s only money we don’t have and will never pay back anyway.

      • 0 avatar
        DeadWeight

        Excellent points!

        • 0 avatar
          chuckrs

          Obamaphones for people who can’t afford a free EV and free EVs for people who can.
          Its the dumb herd in the middle of the economic spectrum who will ultimately take it in the shorts.

          • 0 avatar
            highdesertcat

            A lot of those middle-incomers are tuning out, finding ways around having to work and pay taxes.

            To wit: America’s labor participation rate is at an all-time low, and fewer retirees are starting new careers after retirement because they do not want to be punished and fined for lending their expertise to a socialist welfare economy.

            This doesn’t mean that those retirees are not productive. They’re very productive but just keep it of the books.

            My friend, the retired plumber from New Jersey who moved to New Mexico, is doing exactly that; working off the books.

            Yes, he is MY personal plumber and the personal plumber of just about everyone we know. And he’s raking in the dough.

          • 0 avatar
            superchan7

            I have never heard of an “Obamaphone” except on politically aligned radio talk shows.

            I looked it up. The Lifeline subsidy program began in the 80s and Obama did not create it.

            Increasing EV subsidies may not be agreeable to everyone, but it would help to stick to facts when trying to make an argument. And no, nobody gets a “Free EV.”

          • 0 avatar
            Dan

            “I looked it up. The Lifeline subsidy program began in the 80s and Obama did not create it.”

            The Lifeline subsidy more than doubled under this administration. Saying he didn’t start it is like giving Johnson a pass for Vietnam. Doesn’t work that way. Feed it that much and it becomes your baby.

          • 0 avatar
            highdesertcat

            superchan7 & Dan, about that O’phone. My 23-yo grand daughter who used to live with us is besieged by the O’phone promoters and the State of New Mexico to register and apply for all these freebies.

            Because she is not officially ’employed’ she is urged to report to the nearest employment office and put her name on the job-seekers list and get a free O’phone.

            Seriously! There isn’t a week or so that goes by that she doesn’t get mail (at my house) from these agencies, or from NM Health Care telling her that she can be covered under Medicaid if she isn’t employed.

            So “the powers that be” must be aware that she is a college graduate and that she is not employed.

            This all started right after she graduated from college at the end of May 2014. Different O’phone providers, the NM Health Care agency, student debt assistance, state employment agency, etc.

            I wonder if other states do the same for their recent college graduates?

    • 0 avatar
      sunridge place

      HDC

      I’m shocked that everyone out there in the middle of nowhere needs a personal plumber! You can’t go cheaper with Mexican help there? Those illegals will probably work cheaper than some relocated Yankee plumber!!

      • 0 avatar
        sunridge place

        I also suck at trying to figure out where to reply on my iPad.

      • 0 avatar
        highdesertcat

        It’s a reciprocal relationship. When he needed an endoscopy for cancer a few years back, I drove him to the procedure, sat with him in the prep room, sat with him in recovery, and then drove him home. He has been responsive ever since, and volunteers to help others.

        Where we live, a plumber needs to drive out 26 miles to get to where we are. He already lives here and does a lot of work for farmers, ranchers and others in the area.

        It started off with me. Then we needed help at one of our rentals. Next a friend needed some work done. And so on. Now he has at least one job a day, on average.

        The last time he wanted to change the oil on his wife’s car, he came to my place and we did it over my pit.

        Illegal aliens are good for many day-labor jobs and we use them extensively in non-sensitive jobs. But when it comes to plumbing, water, sewer, gas, AC, I defer to people who know what they are doing. And this guy does. He spent his entire working life as a plumber in NJ.

        BTW, I’m on my iPad Air now, and you reply by tapping the Reply button, sign in, and tap the Reply button again wherever you want to reply or append to.

        If already signed in, just tap the reply button until you get aligned where you want to be.

        • 0 avatar
          sunridge place

          All good HDC and thanks for the iPad advice. Always love hearing your stories from the high desert. We crossed opinions a couple times in the past but I think we are good.

          I married a girl from El Paso a couple years back and make my way near you once a year or so. ..always thought I should get to know you in case I’m out in the boondocks and need some help!

          • 0 avatar
            highdesertcat

            I respect people who advance their own beliefs and posits because life is different for everyone. Interpretations of the facts are often driven by individual experiences and how those experiences have aligned a person’s beliefs and chosen path in his/her life.

            It is only those like the Jonathan Grubers and academici of the world who revolve in their own quadrant of the universe and who believe that theirs is the only opinion and interpretation of the facts that matters that I will hold to task. Incredulous arrogance only indicates their own insecurity.

            About El Paso, my daughter lives on the West Side, off Mesa, near Rudd, and works at UTEP. I used to spend a lot of time in El Paso but since my wife started working from home we hardly leave the house.

            Many things have changed for us when 2015 came around. All good as I mentioned to Marcelo.

            My American-born Mexican foreman, Federico, has a couple of houses in South El Paso but crosses the Zaragosa bridge daily because he now owns his dad’s ranch 20miles south of Juarez, Chihuahua, Mexico.

            I cannot see any reason why you would have to travel up US54 out of El Paso to get to my neck of the woods since there is nothing out here but desert for as far as the eye can see in all directions, plus unexploded munitions from MacGregor Range, Fort Bliss, White Sands Missile Range and Holloman AFB.

            The only thing that keeps us here is the family business that my wife now manages for her parants and sisters. And I could write a book on that alone. This is not the venue for that.

            But my oldest son retired from Banking last year and moved to this area to start a Ranch between Cloudcroft and Timberon, on the East slope of the Sacramento Mountains. Maybe that’s another reason to stay here for us.

            BTW, if you haven’t already done so, and if you have the memory space, upgrade your iPad to iOS 8.1.3. Later this Spring iOS 8.2 will also come out but iOS 8.1.3 has already cleared up some issues I was experiencing during my use of our iPad Air and iPad Air 2.

          • 0 avatar
            KixStart

            hdc,

            So, you’re knowingly participating in something illegal.

  • avatar
    vvk

    A smarter move would be to install charging stations everywhere.

    • 0 avatar
      SCE to AUX

      If they’re not rapid DC Level 3 chargers, don’t bother. Nobody wants to stand around while their short-range EV fills at 18 mph.

      And if you set the price too high, I’ll just charge at home.

  • avatar
    bball40dtw

    How do these tax credits work? If I buy an EV does the tax credit just come off the top of what my annual tax bill is? So if I should pay $10K in taxes, and do so via my job, I just get $7500 back at tax time?

    • 0 avatar
      DeeDub

      Yes. Tax credits are the same as cash.

    • 0 avatar
      SCE to AUX

      The Nissan dealer gave me instant credit when I got the Leaf, which meant I avoided any income tax hassles or requirements.

      This instant reward was in itself a motivation to get the car, because I didn’t want to get burned at tax time in case I didn’t qualify – I just wasn’t sure.

      • 0 avatar
        bball40dtw

        I’ll have to check to see if the Ford dealers do that on the Focus EV. It’s base price is down to $29K without the tax credit.

        • 0 avatar
          sunridge place

          SCE leased his Leaf as he has stated before. The credit is given across OEMs on leases as cap cost reduction that the finance company technically gets but it passes through to the lessee as CCR.

          If you purchase vs lease, then your personal tax situation dictates if you get the full amount. If you read the proposal in this piece, it proposes to make the $ amount an instant thing as a reduction in the price even if you purchase and doesn’t take into account an individual’s tax situation.

          • 0 avatar
            bball40dtw

            Ok. I thought Nissan was doing something different on a purchase. I’ve been thinking about leasing an EV because the $7500 is basically a capitalized cost reduction.

            I e-mailed the Ford salesman I usually do business with. He said that I could lease the FFE for $265/month for 36 months. That is with 15K miles a year for 3 years and just first month payment and start ups due at signing.

  • avatar
    kvndoom

    “I’d GIVE ’em away but my wife won’t let me!”

  • avatar
    kosmo

    Obama is in a position of being able to propose all kinds of pie in the sky ideas, knowing the GOP congress will shut them down, thus appeasing his base, and potentially helping pave the way for his successor.

    Not bashing at all. A GOP prez would do the same if roles were reversed. Politics as usual.

  • avatar
    Master Baiter

    As the Dems used to say about Reagan’s budgets, this one’s “Dead on Arrival.”

  • avatar
    S2k Chris

    I’m a big, dirty, cold-hearted, global-warming-denying, 1%-loving, poor-person-disdaining, Bush-favoring conservative, but even I look at every bada$$ American-flag-waving Tesla P85D sold as one more step closer to taking all of our troops out of the gulf and letting them chop each other’s heads off in peace without our intervention. How much taxpayer money would THAT save? Kinda makes $10k a pop look cheap, no?

    • 0 avatar
      Lie2me

      Were you even old enough to vote for Bush, the first time?

    • 0 avatar
      SCE to AUX

      +10 S2k Chris

    • 0 avatar
      jacob_coulter

      Just curious, when will the people pushing for this corporate welfare finally say “we have had enough subsidies to where this taxpayer graft is no longer necessary?”

      The technology is here and it’s affordable. If you want an electric car, you can go buy a Leaf and it’s LESS than the average new car price.

      Domestic oil exploration in just the last few years has done 1000 times more for weaning us off Middle East oil than any of these programs.

    • 0 avatar
      CarnotCycle

      “…sold as one more step closer to taking all of our troops out of the gulf”

      The USA can remove its military presence in the Gulf anytime it wants. Such a move, of course, would raise oil prices given the local antics which would rapidly ensue (when Fifth Fleet cat is away, all the patrol-boat navies will play).

      From your perspective, sounds like two birds with one stone – via the government doing less, not more. Saving taxes, instead of giving the revenue away to ‘politically correct’ consumers.

    • 0 avatar
      Master Baiter

      “Bush-favoring conservative”

      Bush wasn’t conservative. And that applies to 41 and 43.

    • 0 avatar
      highdesertcat

      S2k Chris, as you progress through life you will learn that one political party is no better and no worse than the other.

      • 0 avatar
        Chocolatedeath

        Damn. I didnt think I would ever hear (see) someone on this sight say that. I realize this 20 years ago but noone seems to believe me. folks always seem to harp on this prez is worse than that prez however IMO at nearly 50 years old the only two bad ones have been Nixon and Carter. IMO everyone else has been ok. warts and all.

        • 0 avatar
          highdesertcat

          It really depends on which s!de of the dividing line you live. For more than 50% of America O* is the best prez there ever was. For the remainder O* is worse than even Nixon and Carter.

          It really is driven by if one is on the receiving end or the paying end of the economic policy how one sees the situation.

  • avatar
    28-Cars-Later

    MY15 Chevy Volt: 101 city / 93 highway

    60/40 split @ 12K annually = 7200/4800

    7200 miles / 101mpg = 71.28
    4800 miles / 93mpg = 51.61
    TOTAL: 122.89 gallons of fuel annually

    122.89 * 5 year period is 614.45 gallons used / $10,000 USD incentive = $16.27 dollars spent per gallon of tax incentives over a five year period.

    Funky math, eh?

    RBOB March future: $1.5029/gal
    RBOB April future: $1.7423/gal

    http://www.cmegroup.com/trading/energy/refined-products/rbob-gasoline.html

    • 0 avatar
      S2k Chris

      Wouldn’t a better metric be:

      Regular car: (12k miles/yr * 5 years)/25mpg = 2400 gallons of gas used

      2400-615=1785 gallons saved by Volt

      10,000/17.85 = $5.60 to save each gallon

      Versus

      135B gallons of fuel used annually
      http://www.eia.gov/tools/faqs/faq.cfm?id=23&t=10

      13% comes from Middle East
      http://www.npr.org/2012/04/11/150444802/where-does-america-get-oil-you-may-be-surprised

      That’s 17,550,000,000 gallons annually, or 175,500,000,000 over the last 10 years. The Iraq and Afghanistan wars are projected to cost $6T.

      $6T/175,500,000,000 = $34.19 per gallon.

      $5.60 versus $34.19.

      Obviously not strictly scientific, but….

      • 0 avatar
        28-Cars-Later

        Thanks for the additional figures.

      • 0 avatar
        Dan

        I’m the last man to defend nation building, least of all in wogland, but that 6 trillion dollar Hahvahd study got there on fast and loose projections through 2053. Amortizing a 50 year cost over a 10 year benefit seems a bit disingenuous.

        Calling the US oil market 2003-2013 a benefit of the Iraq debacle, much less Afghanistan where they don’t even have oil, seems even more disingenuous than that.

    • 0 avatar
      heavy handle

      By your logic, the less gas an electric or hybrid-electric car uses, the more it costs. A pure electric charged with renewable electricity would cost INFINITY!

      • 0 avatar
        28-Cars-Later

        What? The more miles traveled over time would make the Volt more cost efficient per gallon but in a fixed period the costs and savings are um, fixed. Something like a Tesla does not use gasoline at all to my knowledge, how would you calculate its gasoline usage?

        S2K Chris has different figures to show the cost per gallon saved of the tax rebate vs a conventional car.

    • 0 avatar
      bball40dtw

      28-

      I don’t know if your Volt math works. The people I know that have Volts barely use gas. I have a customer that hasn’t been to a gas station in 4 months and the neighbor down the street fills up every other month. My neighbor used just over 45 gallons of gasoline in 2014. My customer has only filled up once since he bought his Volt in early 2014. So 9.3 gallons last year.

      • 0 avatar
        28-Cars-Later

        That’s an interesting account. I simply can go off of published figures but if the data shows in fact very little gasoline is being used then in fact the tax investment starts to show a return.

        • 0 avatar
          bball40dtw

          GM probably surveys the heck out of Volt owners and knows how much gas is being used. I wonder what the real answer is.

        • 0 avatar
          dal20402

          You have to keep in mind that there will be major selection bias in the real-world Volt userbase. There’s much more incentive to buy a Volt if your travel patterns are such that it would allow you to use very little gas, and if you live in a place with very cheap electricity.

          • 0 avatar
            bball40dtw

            Oh I know. But if your travel patterns fit that window, which they do for many Americans, then the Volt can be a great vehicle. The 40 mile range is not big enough for me. I worry that in the winter I would only get 30 miles out of a charge. I’d rather have an EV that gets 70+ miles from a charge.

      • 0 avatar
        chuckrs

        Your customers would need to factor in costs of plugging in for a recharge and the amount of energy used to generate that electricity. I’d guess it would still be pretty efficient.

  • avatar
    TDIGuy

    If you have to increase the cash outlay to get people to buy these things, doesn’t anyone realize that that is probably the only reason they are buying them? It skews the sales figures to look like more people prefer PHEVs over other fuel saving measures.

    Having said that, 10 grand would make the plug in version of the Ford CMax cheaper than the regular version. I wonder how many other models would be effected?

  • avatar
    jpolicke

    In other news, EV prices are expected to increase by approximately…$2500.

  • avatar
    an innocent man

    Why not give everyone a book of ration coupons? You get 100 gallons of gas a year, how you use it is up to you. That’d push people into cities, and into electric. Win-win, as they like to say.

  • avatar

    By the way, anything that could lower the West’s dependency on import oil from such volatile regions as the Arab states I consider a blessing. Alternative energy sources can help tremendously in this respect. Having your own shale oil may be considered a strategic reserve for the future then.

    • 0 avatar
      chuckrs

      Alternative energy can help tremendously…..

      http://spectrum.ieee.org/energy/renewables/what-it-would-really-take-to-reverse-climate-change

      An account be two Google engineers tasked to a multi-year study of alternative energy with a specific focus on carbon.

      • 0 avatar
        highdesertcat

        My electriic bill has nearly tripled over the last four years from ~$50/month to now >$140/month, all because we’re forced to pay for renewable energy sold to the Texas grid at El Paso, TX.

        And BTW, our electricity is still as flaky as ever, with just as many brownouts, interruptions, glitches and spikes as before. I still have to keep three AC generators ready for power failures. IOW, I haven’t gained a damned thing for all the extra money I am forced to pay. But the cost of my UPS batteries have skyrocketed!

        • 0 avatar
          chuckrs

          HDC

          I tried to keep the IEEE link neutral as possible, but – spoiler alert – carbon-conscious Google found no way forward short of a disruptive technology – not wind, not solar.
          In RI, I will pay my portion of the $0.23/kwh for offshore wind and expect a similar experience to yours. You can thank T Boone.

          • 0 avatar
            highdesertcat

            chuckrs, I wouldn’t mind the extra cost IF we in Southcentral NM would benefit from it. But we don’t.

            The increase in the cost of electricity is less than what it costs me to run my three AC generators in fuel every Sunday from noon to 6pm, but with the flaky electrical service, this is what many of us are reduced to; our own auxiliary power generation.

            We factually have acres and acres of solar in the desert and numerous windfarms, yet all of that electricity is ‘exported’.

            In fact, a brand new power transmision line called SunZia is being built right now, not to benefit us, but to benefit AZ, TX, CO, and Western OK.

  • avatar
    Big Al from Oz

    The US and US Government wants cheap energy.

    Now it’s competing against itself because of cheap energy?

    Who’s paying for this pathetic logic.

    Ah……the consumer.

  • avatar
    Chocolatedeath

    Well if someone would offer me a six cylinder diesel plug in extended range in a CUV I would take it.Make it as light as possible and about the size drivers characteristics of my CX9 with 35mpg overall. Yes I would take it.

  • avatar
    Jerome10

    10k?? Why not just make the car free? It’s for a good cause right. We have the money.

    Getting tired of this stuff.

    If this tech were so great then it should sell on its own. It’s not so it doesn’t.

    Other question : why so much silly focus on electric cars anyway? Wouldn’t Natura gas vehicles make much more sense in the USA? Easy conversion from existing gas engines to NG, no environmentally terrible metals and chemicals, clean clean burning fuel instead of coal or nuclear power, fast fueling with existing infrastructure, and the USA has a ton of it.

    Just seems to me it would make far more sense and make a much bigger impact more quickly than pushing electric cars. My guess? Natural gas isn’t “Sexy” like electric technology and so it’s paid no attention. Am I wrong?

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