2014 Budget Proposal Ups EV Credit To $10,000 Point Of Sale Rebate Thru 2018

APR 11 2013 BY JAY COLE 17

Time To Break Out The Stock Footage Of The President In  Plug-In Vehicles.

Time To Break Out The Stock Footage Of The President In Plug-In Vehicles.

When President Barack Obama delivered the 2014 budget proposal to Congress on Wednesday, it contained some long awaited changes to the current federal credit system offered on the purchase of new electric vehicles.

The current EV incentive program gives purchasers of electric vehicles the ability to deduct up to $7,500 off their taxes at year’s end.   This existing system has two definite flaws to it:

  1. Claiming the Credit – EV owners have to had paid $7,500 in taxes during the financial year to receive the $7,500 back at tax time, making the credit almost a class-oriented program
  2. Purchase Timing – The program artificially inflates purchases at year’s end when the credit refund will come quickly, and deflated demand during the beginning of the year, when purchasers know the credit is at least a year away from being realized
President Obama gets into an electric Ford Focu In July OF 2010.  Federal EV Programs Made This EV A Reality

President Obama gets into an electric Ford Focus Electric In July OF 2010. Federal EV Programs Made This Plug-In A Reality

Under the new proposal, that credit would jump to $10,000 and be taken right at the point of sale, when the transaction takes place.

This plan does not sit well with the National Automobile Dealers Association, as the onus would shift to the dealer to qualify for the credit on behalf of the consumer.

Bailey Wood, NADA spokesperson said that “we just don’t think it’s workable in the showroom.”  Still, we imagine if it goes through, they will figure it out just fine.

It is worth nothing that this increase to the EV incentive and the changing of the program to be rebate-based (in the consumer’s eyes anyway), is a long way from becoming reality.

To say that Republican support on electric vehicles has diminished of late, would be a grand understatement.  And given how this is a key component of the President’s call for  million plug-in electric vehicles  on the roads by 2015, we are skeptical if it has a chance to succeed.

Those prospects of potential failure did not stop the lobby group of the automakers, known as the “Alliance of Automobile Manufacturers,” from getting fairly excited about the proposition of making their plug-in vehicles easier to sell.

“We generally support incentives that can help move our models from dealer  lots to people’s driveways, but we defer to policymakers in setting the precise dollar amount needed to increase sales.”

A Free Electric Vehicle For Everyone!  (not quite)

A Free Electric Vehicle For Everyone! (not quite)

The budget also contains other provisions on the development of new battery technologies and manufacturing processes to bring the cost of electric vehicles down, as well as to fund other alt-fuel research.  In total, a $2 billion dollar trust would be set up, but given the funding would come from diverting oil revenue, we find it unlikely to get past the GOP-led House.

The new $10,000 EV incentive proposal would replace the current system, and be in effect until 2018, at which point it would be phased out by 2021.  The estimated cost of the credit would be $4.2 billion dollars.

Given some very high-profile recent failures in both the battery (A123) and automotive sector (Fisker) of late, the entire new proposal for simplifying and increasing the EV credit is on very shaky ground, so you might want to just lightly pencil in that $10,000 rebate off your next electric vehicle buy.


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17 Comments on "2014 Budget Proposal Ups EV Credit To $10,000 Point Of Sale Rebate Thru 2018"

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George Bower

Yes I think we can consider Obama’s budget DOA.


Sort of ironic that this comes on the same day another part of the government tells us Li-ion batteries fail to deliver, must be made safer, and are at least a decade away from any significant improvement.

“Lithium batteries fail to deliver, must be safer, regulators told”


Jeeze, give me another reason to not like the NADA. I’m sure Tesla would have no problem w/the $10K.

There’s a 3rd flaw to the plan. It should be limited to vehicles manufactured/assembled in the US. That would include the Leaf, but not the PiP, not the Spark (an so forth). Or maybe it could be based on US content; say at least 50% US content.

jon b

I like the way you think. 🙂


Why ? Protectionism ?


I should add. When Tesla sells in Europe or Japan, they get all the tax benefits (or rather their customers do). So, why should we have this protectionist racket ?


Perhaps it is in order to get “the racket” in the first place by appeasing the protectionists. Maybe I am an idealist, but I believe that EVs can stand on their own merits and should not need any credits or preferential treatment that creates a push-back and negates the incentives making them a waste.


Kind of like opening a can of worms, but I feel the same way about having kids and buying a house. I’ll give up my EV credit when they give up their credits.


LOL, American cars sold in Japan (my sides hurt). I don’t have the energy to get into a debate about their protectionism (even w/regards to their dealings here in the US). Instead, let’s focus on the #1 car market in the world, China. They don’t seem to give equal footing, do they? Finally, it’s US tax dollars, so I’d rather it go towards employing US citizens. Have you checked the unemployment rates lately?If you want to call that protectionists, more power to ya. Maybe it will help sell this EV-credit idea to the GOP (prob not).

But no worries. Obviously this will never fly in our pseudo “free market” society. Still won’t stop me from bringing it up when I can.


Hey…I’m a Republican and I like your idea as well. Not all Republicans are against EVs. Just like not all Democrats drive hybrids or EVs (some drive SUVs believe it or not). I think you stated this idea very well. Cheers!

Josh Bryant

I think the $10k is for vehicles under $50k, the more expensive EVs would still only get $7,500. Call it the Tesla rule I guess. Not sure if about the point of sale aspect.


I agree, i think. I believe that we should base it on the particular country’s taxes levied on US Auto going there. Basically, if China taxes the crap out of US Auto’s, China imports do not qualify.

Joseph Wallace

I think keeping the $10,000 credit for US brands will cover your sentiments better. US content is not accurate. It does not consider engineering and profit. In this case only GM, Ford, and Tesla qualify.


How about $5K to help drive down manufacturer cost of products. A higher subsidy makes parts manufacturers and the car builder know that they don’t have to strive to get their costs down – there is a subsidy to “mop up the slop”. Subsidies are a good kick start but must be weened away-from, not grown.

This is like paying for your kids to go to college and then buying them a house rather than making them use the skills learned in college to save up and buy that house. Let’s get the manufacturers to be self-sufficient on their merits alone.


They might intend this to be good until 2018 but every year the funds for the rebate will have to be approved by Congress.. not a good idea!. The current tax credit is a change in the tax law and its good until it expires.. and it promotes growth since it lowers the taxes of those who pay taxes. Growth is good for our economy. A rebate is just a free money giveaway.

I can see a requirement that batteries have to be made in the USA, it might have saved A123 and it would have induced LG to finally start up their battery plant. Nissan already built theirs.

Anthony Fiti

I don’t think EVs need more/higher tax credits. Changing to point-of-sale would be good, but at this point I think EVSE infrastructure is needed more. Maybe in “greener” states this isn’t a problem, but Nevada is bereft of charging stations where people *actually* go.


The problem with credits like this going directly to the dealers is that it give dealers an excuse not to bargain on the actual price for the vehicle, claiming the credit is a discount.

This happened during the “Cash For Clunkers” – dealer would not sell cars for less that full MSRP