Obama’s New Budget Calls For $10,000 Rebate For Electric Cars

It’s an election year, which means the partisan political bickering is only getting warmed up. So it is no surprise that politicians on the right side of the aisle are already calling Obama’s proposed 2012 budget nothing more than a “campaign” document. Among the many provisions Obama outlines in his proposal is billions of dollars in infrastructure funding, in addition to a $10,000 rebate for the purchase of electric and other green-tech vehicles.

We’re going to focus on that proposal, because it would dramatically change the dynamic for electric vehicles. Right now, the $7,500 tax rebate (enacted by George W. Bush) means that buyers pay the full price of a vehicle like the Chevy Volt up front. Come tax time, they can deduct up to $7,500 from their taxable income.

The problem with this rebate is that it forces would-be EV buyers to come up with the cash up front. Obama’s proposal would turn the tax credit into a $10,000 rebate, which comes off the price of the car at the point of sale. So instead of making payments on a $41,000 Volt, buyers would make payments on a $31,000 Volt. For the Nissan LEAF, the price would come down to about $26,000; the Mitsubishi i would squeek in at under $20,000.

I’m not sure this rebate stands a chance of getting through a divided Congress, but it would be a huge boon to the electric vehicle business. Right now there is legitimate criticism that the tax credit favors wealthy buyers who can afford higher payments for a lower tax rate. It is said that the income of the average Chevy Volt buyer is about $170,000, which makes sense as a lot of celebrities like Jay Leno flocked to the Volt when it first came out. This rebate would make the payments easier to swallow for the average American.

Incredibly, the $10,000 rebate could also be applied to natural gas vehicles and other high-tech, green cars. That would open up a lot of options.

I for one would run out and buy a Nissan LEAF tomorrow if this proposal actually gets passed. How could I not? For about $300 a month, I could have an all-electric car. That’s almost my entire monthly gas tab between me and my girlfriend.

Source: Gas2.0