The Obama administration’s proposal to offer electric vehicle buyers a $7,500 rebate when they make their purchases is drawing criticism from a leading Senate Democrat.
The administration’s planned rebate would replace the current $7,500 federal tax credit, and that has the chairman of the Senate finance committee, Max Baucus (D-MT), “concerned from an effectiveness standpoint” according to committee counselor Ryan Abraham.
Speaking before the Electric Drive Transport Association conference in Washington, DC on Wednesday, Abraham said the current tax credit is a much stronger incentive for potential EV buyers. He also said that Baucus has expressed concerns that the rebate would further complicate the federal tax code.
Abraham’s comments may indicate that the Whitehouse’s proposal as well as a similar bill submitted by Senator Debbie Stabenow (D-MI) could be in trouble.
Abraham went on to say that the current EV tax credit program, which was introduced under the Bush administration and expanded by the Obama administration, is in no jeopardy of being cut. Abraham told the group, “I don’t think members will have much appetite to repeal current law incentives.”
The thinking behind the Obama administration’s proposal, which was introduced last February, was that consumers would respond more positively to the immediate reduction in the purchase price of their vehicles. President Obama has repeatedly expressed his desire to see one million electric vehicles on the roads of America by 2015.
The proposal would allow dealers to be reimbursed by the federal government in exchange for lowering their sticker prices on electric vehicles in much the same way they were reimbursed under the CARS program, better known as Cash-for-Clunkers.
The National Automobile Dealers Association has raised concern about the plan, in no small part because of the way dealer reimbursements were mishandled and delayed during that program.
NADA spokesman Bailey Wood said the administration has not yet provided details concerning how reimbursements would be handled.
Senator Baucus has expressed concerns that the proposed rebate would muddy the waters for consumers. Abraham said Baucus is concerned that buyers could have a hard time distinguishing the rebate amount from other discounts which are offered at the discretion of dealers.
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