Today, most plug-in electric car buyers qualify for a Federal income-tax credit of $2,500 to $7,500–but Senator Harry Reid thinks those incentives should be expanded.
He proposes to overcome one challenge with that incentive: Buyers must wait up to 15 months to realize the benefit, which they don’t earn until they file their annual income taxes for the year of purchase.
ALSO SEE: Obama Budget Boosts Funding For More Efficient Cars, Hikes Electric-Car Tax Credit
(Leasing an electric car, however, allows the lessee to benefit immediately, with the tax credit generally used by the financer to reduce the monthly payments.)
President Barack Obama has urged in his last three budgets that the highest credit be raised to $10,000.
President Obama inspects the 2011 Chevrolet Volt
Obama has also proposed that dealers be allowed to take the credit, which they could then apply to the purchase cost, effectively making it an immediate rebate–which would let buyers see the benefit immediately.
Congress has taken no action on either of those proposals, nor does it seem likely that it will do so in today’s highly partisan political environment.
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But as the head Democrat in the U.S. Senate, Reid [D-NV] is backing his president.
In a speech last week, according to The Detroit News, Reid said:
To truly promote innovation, we must as a Congress create opportunities for consumers to invest in advanced technologies, and we haven’t done that yet.
We need more tax incentives for that. In 2008, we encouraged America to invest in the growth of the electric car industry with tax credits for qualified electric vehicles.”
Rendering of Tesla battery gigafactory outside Reno, Nevada, Sep 2014
Reid is also likely backing a new and major investor in his state: Tesla Motors, which announced this month that it would locate its lithium-ion battery gigafactory in Nevada.
MORE: What Will Tesla Gigafactory Cost Nevada? How About $1.3 Billion?
While prospects for an increased Federal electric-car incentive appear dim in the immediate future, at least that possibility is staying in the news.
Next up, perhaps, from Reid’s political opponents: denunciations of any and all plug-in electric vehicle programs and incentives.
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