Will $7,500 Federal Tax For Electric Vehicles Be Extended to 500,000 Cars?

A day after President Obama called for 1 million electric cars on America's roads, U.S. Rep. Sandy Levin, D-Mich., said today he will try to double the number of vehicles per manufacturer eligible for federal tax credits.

Levin said he will introduce legislation that aims to allow the first 500,000 electric cars sold by an automaker to be eligible for tax credits up to $7,500. At present, the law is written so that only 200,000 are eligible.

The tax credits dramatically lower the price of an electric car to many buyers. The all-electric Nissan Leaf, for instance, lists for $32,780 before destination charges are thrown in and the Chevrolet Volt extended-range electric costs $41,000, including delivery. State and local tax credits are sometimes available as well.

In his State of the Union address, Obama again called for meeting a goal of having 1 million electric cars on the road by 2015. Conceivably that could include cars that are partially electric powered, such as hybrids.

"Green vehicles represent the vanguard of automotive innovation, but they have to be economical for consumers and profitable for manufacturers," said Levin. "Raising the cap on this credit will help carmakers reach the demand and production scale necessary for long-term viability."

Source: USA Today