Michigan Congressmen propose extending $7,500 EV tax credits

Jan 28, 2011 3:14 PM

Two Michigan Representatives, Democrat Carl Levin and Republican Mike Rogers, have proposed boosting the federal tax credit for electric vehicles, according to USA Today.

Currently, electric cars with a battery capacity of 16 kwh or more rely on a federal tax credit of $7,500 to bring their overall costs in line with what automakers think consumers will pay for them. The Chevrolet Volt, for example, stickers for $41,000, but costs $33,500 net after the tax credit. The $32,780 Nissan Leaf similarly sees its overall price drop to $25,280 after the credit. (California Leaf buyers also benefit from an additional $5,000 state tax credit, and potentially some local credits, as well.) Credits are also available for electric vehicle chargers.

But those federal tax credits currently are only available for the first 200,000 electrically powered vehicles sold by each automaker. Following a suggestion from Vice President Joe Biden, the two Michigan Representatives have sponsored a bill to extend that to the first 500,000 vehicles from each automaker.

So far, General Motors says it expects to sell 10,000 copies of the Volt this year, and Nissan has said it has more than 20,000 orders for the Leaf. So it will be years before the current 200,000 unit ceiling is reached, to say nothing of 500,000 EVs

What do you think? Should the federal government be subsidizing electric cars? And is 200,000 units per automaker enough? Let us know in the comments below.

Read our recent Chevrolet Volt and Nissan Leaf driving impressions.

—Eric Evarts

See our guide to fuel economy for advice on saving gasoline. Learn about future technologies in our guide to alternative fuels.