Senator Stabenow: $7,500 Electric-Car Credit Should Be Rebate

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It's long been known that purchase rebates--buy a car, get a check--are a more effective incentive for purchase of any kind of car than an income-tax credit, which may take a year or more to affect the buyer's cash position.

But the current tax credits for purchase of plug-in cars, up to $7,500 for battery packs of 16 kilowatt-hours or more, was enacted because it was simpler. It used a mechanism already in place to provide tax credits to purchasers of hybrid-electric cars, which had been scheduled to expire at the end of 2010.

Yesterday, Michigan Senator Debbie Stabenow introduced a bill, the "Charging America Forward Act," that would provide consumers with a $7,500 rebate within weeks of their purchase of a qualifying plug-in car.

Electric-car charging, from NRG Energy

Electric-car charging, from NRG Energy

It is essentially the same bill she introduced last August, one that was not taken up and voted on by the full Senate. The bill may have extra impetus this year because President Barack Obama, in his January State of the Union address, reiterated the goal of 1 million plug-in vehicles on U.S. roads by 2015.

That goal is considered a long shot by many industry analysts, but Vice President Joe Biden subsequently expanded on the pledge, suggesting a handful of new policies--including purchase rebates for consumers--to help achieve that goal.

First 2011 Chevrolet Volt built on production tooling at Detroit Hamtramck plant, March 31, 2010

First 2011 Chevrolet Volt built on production tooling at Detroit Hamtramck plant, March 31, 2010

Two weeks ago, the other senator from Michigan, Carl Levin, and his brother, Rep. Sander Levin, also of Michigan, proposed raising the cap on the number of plug-in vehicles eligible for the tax credit. That limit is now 200,000 per manufacturer, and the Levins propose it be raised to 500,000 per maker.

Not at all coincidentally, Michigan will soon house a handful of lithium-ion cell plants for automotive batteries, and the 2011 Chevrolet Volt range-extended electric car is already being built in GM's Detroit-Hamtramck assembly plant.

The video below shows Senator Stabenow formally introducing the bill on the floor of the U.S. Senate.

[Sen. Debbie Stabenow]

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