US Representative Pushes For $10,000 Electric Vehicle Point-Of-Sale Credit

MAY 19 2014 BY ERIC LOVEDAY 25

Vermont has only one representative in the U.S. House.  His name is Peter Welch.

Luck for us, Welch is an electric vehicle supporter.  Recently, Welch laid out details of his “The Electric Vehicle Act,” in which he calls upon the U.S. government to increase the electric vehicle credit from $7,500 to $10,000 and to make it a point-of-sale rebate, rather than a tax credit.

This is certainly not the first time there has been legislation introduced calling for upping the electric vehicle incentive or switching it to point-of-sale and it likely won’t be the last time we hear of this.

Our hope is that with more and more backers of such a change coming forward with legislation that eventually the switch will be made.

We’re not so sure that the incentive needs to be increased, but the switch from a credit to a point-of-sale rebate would likely be welcomed by us all.

Source: Seattle Pi

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25 Comments on "US Representative Pushes For $10,000 Electric Vehicle Point-Of-Sale Credit"

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pjwood

Could the worry be a faster grey market, sponsored by taxpayers?

David Murray

I think the $7,500 is plenty.. But the other changes would be nice. That would result in more purchases instead of leases.

John F

How about changes that would drive up the all electric range? Keep the average incentive at $7500. However, make it $5000 for a range of 50 to 100 miles, $7500 for up to 150 miles, and $10000 for over 150 miles range.

Anthony Fiti

I would expect any change to a point of sale rebate would need to be accompanied by a cost-saving change to the program. That could range from a decrease in the monetary amount (down to $5000), or a cap on the value of the vehicles eligible ($50,000).

Mint

I say reduce the incentive to $5000 and increase the cap.

QCO

The Administration has been pushing to turn the credit into a rebate for some time, so not sure how agreement by 1 of 435 representatives is newsworthy. Would be more interesting to see a strategy on how this could be achieved.

Changing to a rebate would increase the effectiveness since some people are not able to take full advantage of the credit.

Steve

I would favor legislation that would guarantee that the incentive will last a few more years into the future. That would be worth it even if the amount decreased.

Spec9

Yeah, I like this idea more.

Nix

Yes, the ramp-down for credits is way too steep. It is also based upon total number of cars sold, and not a proportion of cars a car maker builds.

There is going to be a point where manufacturers who got into the EV business early, and sold the most cars soonest, will be punished by losing their credits first.

At that point, the lazyist foot-dragging anti-EV companies who sell the least EV’s now, will be rewarded for dragging their feet. They will get a $7,500 dollar competitive advantage in the market, just for dragging their feet on EV sales as long as possible.

Nelson

That is why I favor making it a point of sale credit for the first million EV’s sold regardless of manufacturer. Once the fist million are sold, they can deside if they want to extend or modify the POS credit.

NPNS! SBF!
Volt#671

Rick Danger

Nix, Nelson, +1

Nix

That is a good point.

ydnas7

leases were/are better than purchases, they are a try before you buy

scottf200

Perpetual car payments are one of the reasons our countries savings rate are so dismal. Purchase the car and keep it.

Alan Campbell

With the battery cost decline over the past years, a $10,000 point of sale incentive by 2015 would allow for the battery capacity of current first gen EVs to move from from 24kWh(100 mile) to 48kWh(200 mile) while maintaining current EV Net pricing.

Which also makes ‘buying’ an EV more viable.

Nix

It’s not going to happen.

Just last week, the Senate GOP killed H.R. 3474 which was a large omnibus Tax Cut Extension bill.

That’s right, Republicans voted against a bill full of Tax Cuts.

This was the bill that contained all the tax cuts that both sides wanted. Any tax code changes that aren’t in that bill, have ZERO change of being passed. Especially considering that the GOP voted down the bill that contained tax cuts that the Republicans themselves have passed year after year for a a long, long time.

Nix
Pros of making it a point-of-sale credit: 1) Reduces any state sales or ownership taxes that are based upon the purchase price. 2) Keeps people from having to finance the extra $7,500 while they wait for their taxes. 3) No more confusing Cars.com and AutoTrader ads where you have to read the fine print and guess at whether the rebate is already priced into the advertised price. Cons: 1) States lose tax revenues from sales. States hate this, and it could be considered an “unfunded federal mandate”. I’m certain every single Red State Governor will make this out to be the end of the world, and turn it into a political talking point. Right wing radio will rant endlessly about the Federal gov’t interfering with state tax revenues. 2) Well informed consumers who plan ahead, can reduce their payroll deductions for federal taxes starting at the first of the year, and have the $7,500 cash in their pocket by the time they are ready to buy later in the year. So anyone can effectively do their own point of purchase discount. (This requires discipline and dedication!!) 3) Some dealerships WILL figure out a way to pocket this money for themselves,… Read more »
scott franco

“Some dealerships WILL figure out a way to pocket this money for themselves”

This is already true. Having a 7500 incentive just makes the car maker free to increase the the price by that much.

Nix

Yes, there are already examples of car dealerships selling cars to themselves and taking the $7500 tax credit, and then selling the car as “zero miles” and not really telling the buyer that it is actually a “used” car being titled for a second time.

That last thing we need is more of that sort of behavior, made even easier.

Foo

This is why we need special laws to protect dealerships. They add so much value (to their own wallets).

Driverguy01

@NIX
Here in Quebec, the rebate is calculated AFTER TAXES ON THE FULL PRICE OF THE CAR ARE PAID.
For example, my Volt was, at the time, $53k (inc. options and fed and provincial taxes (15%)) – $7769 (now it’s $8k).
So it was the same as if my car was tax free plus about $1k off. Final price i had to pay was around $44k.

Dont think they will apply the rebate BEFORE taxes, they are not that crazy!

Chris O

Anyone who really wants to promote plug-ins it should advocate exemption from the obligation to be sold by franchise dealers and allow them to be sold by specialized sales outlets that can be bothered to do the extra legwork to close the deal on these relatively complex products and are not bothered by the fact that less future maintenance revenues interferes with a maintenance revenue based retail model.

Mark C

Point of sale credit makes it so even people who do not have large tax liabilities can collect the full amount. The other real good thing is it reduces the amount financed so your monthly payments are lower. {Obviously, this last part doesn’t mean anything to those who can pay cash.}

ModernMarvelFan

EV don’t need incentives…

All we need is to raise gas tax and taxes on ICE vehicles….

Josephus

Point-of-sale credit is already available with leases, and its associated buyout option at the end.

The real travesty of the $7500 credit is that it penalizes EVs in favor of PHEVs.

The $7500 credit was designed for the Volt, as the credit already scales up to, but not past a 16kW battery. EVs with large ranges are the losers here, which is why we don’t see any except Tesla. It would be fair to remove the kW limit of the credit and just make it $468.75/kW. The Leaf and Focus would get $11,250, Model S would get $28,125 and $39,843.75. How’s that for level playing field?

Anthony’s suggesting that a conversion to a point-of-sale credit would probably need to be tied to incentive reductions, is unfortunately, probably true. But the cap of 16 kW should still be taken away. So make it $312.50/kW, or even less, just take away the cap.

With the cap, manufacturers have been reticent to go more than 8kW past the cap, hence our current 76 mile range glass ceiling. Remove the cap and manufacturers will then be in a position to give that elusive 200 mile range.