Obama Doubles Down on Plug-In Cars, More Policy Tweaks Coming

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Barack Obama

Barack Obama

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Last night, in his State of the Union address, President Barack Obama reiterated his support for expanding U.S. production and sales of plug-in cars that run on grid power.

Today, according to the Detroit News, a slew of policy changes will be unveiled by Vice President Joe Biden to advance that goal. Among other initiatives, the Administration will propose to convert the present $7,500 income-tax credit for electric-car buyers to a direct purchase rebate.

Purchase rebates, effectively refund checks that arrive within weeks of the buyer taking delivery, are widely accepted to be more effective than income-tax credits. Not all buyers qualify for such credits, and they can take as long as 15 months to realize, since they can only be claimed when taxes are filed the next year.

The president reiterated his campaign-trail goal of having one million plug-in vehicles on U.S. roads by 2015, a number that many industry analysts consider to be a stretch above what's possible.

2011 Chevrolet Volt

2011 Chevrolet Volt

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In his address, Obama returned to themes of clean energy and oil independence, setting an even more audacious goal of having 80 percent of the nation's power produced from "clean energy" sources by 2035, a quarter of a century hence.

The President said he will ask Congress to end billions of dollars of tax breaks for the oil industry, which he called "yesterday's energy" and use those funds for higher investments in a variety of clean-energy programs.

In roughly three weeks, Obama will release his budget proposal, which White House officials said would include an additional $2 billion in funds to enable more regions and communities to install infrastructure to support plug-in vehicles. That would primarily include recharging stations, both public and private.

Today, Biden will visit a lithium-ion cell plant in Mount Comfort, Indiana, owned by Ener1 [NASDAQ:HEV], where he's expected to announce further details of the president's proposals.

[Detroit News]

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Comments (9)
  1. I think this is certainly a move in the right direction, as a push away from dependence on gasoline powered engines needs to happen eventually. With that said, the energy has to come from somewhere, so its important to consider that reducing coal dependency is an important step as well.
    Of course, removing those tax breaks probably mean an increase in Gas prices. I suppose this may be a necessary evil to get people to move towards cleaner energy, but it is still going to have a negative impact on those who are unable to afford an electric car.

  2. I do not see how we can get 1 million plug cars on the road in 5 years. That includes the Leaf, Volt and all the others combined.

  3. $7500 purchase rebates would be awesome, but I still feel like that ends up in the pockets of car companies rather than consumers. The manufacturers have responded to incentives by raising the price of the vehicle higher than it would be without incentives.

  4. There are 200 million cars in the U.S. and we are talking 1 million plug cars in 5 years, some of those like the Volt will still use gasoline. We need the Open Fuel Standard to put 100 million FFVs on the roads using NO middle east oil in 10 years.

  5. Let me get this straight, by increasing the price of gas considerably, every middle class family will somehow afford a +30,000$ vehicle that will run up the electric bill and limit the jobs available due to the reduced commute ranged. All with the increased living costs (food, etc) as a result of the gas price. Did I miss anything else?

  6. @Larry,
    You missed two things. One the average price paid for a new car is $28,000 in the USA. So the LEAF is priced competitively. Secondly, the owner will save thousands of dollar per year by not paying for gasoline. Well, there is a lot more that you missed, but I will leave it there for today.
    John C. Briggs

  7. The Leaf may be affordable after the federal and state assistance. If we can get employers to install chargers, then commuters can use these and save lots of fuel.

  8. Mercedes-Benz. The German luxury brand is fielding a fleet of "F-Cell" vehicles in the U.S. Forty are being driven by customers now, with another 20 on the way. They lease for $599 a month for three years — including fuel.

  9. @Jackie: There are fewer than 500 hydrogen fuel-cell cars on U.S. roads today.

    Just for perspective, as of the close of 2012, there are more than 65,000 plug-in electric cars--and that number is likely to double during 2013.

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