Raise Federal EV Tax Credit To $10,000, Says Vermont Congressman

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The key to kick-starting electric sales in this country is to raise the federal tax-credit for said purchase up to $10,000, up from the $7,500 where it stands currently, so says Vermont Congressman Peter Welch anyway.

The main reason for the increase, according to Welch, is that it would make EVs more affordable to middle-class Americans — reasoning that you can’t really argue with. Not effectively anyway. 🙂

Image Credit: Tesla Motors

Another reason, though, one which he considers to be nearly as important, is that such an increase in EV adoption would help to limit vehicle emissions, and thusly greenhouse gases — something that Welch says he feels strongly about. Easy to see why — the state took quite a beating (especially economically) recently, courtesy of Hurricane Irene. And this sort of thing is predicted to become quite a bit more common in coming years via climate change.

MSN Autos provides more info:

Welch said he planned to introduce the legislation as the Electric Vehicle Act when he returns to Washington, where he has an EV tax credit ally in the White House. In its most recent budget, the White House also proposed raising the federal tax incentive for purchasing an EV from $7,500 to $10,000. But the larger tax break wouldn’t apply to vehicles with a sales price of more than $45,000. For luxury EVs such as the Tesla Model S and Cadillac ELR that are over that limit, the tax credit would be capped at $7,500.

According to Karen Glitman of the Vermont Energy Investment Corporation, a nonprofit consulting group that promotes efficient energy, there’s something else important to note — drivers in Vermont spent around $1.1 billion on gasoline and diesel in 2010. A huge amount of money — why send that out of state?

“We need to keep that money with Vermonters and keep it working in Vermont rather than sending it overseas, for the most part,” Glitman noted.

A very good point, and one that is not often brought up when discussing EVs.


Of course there are other ways to stimulate EV uptake as well — it need not only be through direct economic subsidies. Vermont’s neighbor Connecticut recently began a rather different approach — aiming to incentivize EV sales at the dealership-level.

It’s hard to say which approach would be more effective, generally speaking. Perhaps it would depend entirely on the specific market/environment? So much of an incentive’s success comes down to the specifics of the market, as we recently discussed with the release of the International Council on Clean Transportation’s (ICCT) newest report.

If I had to venture a guess, though, I’d say higher tax credits would likely be quite effective for the Vermont market, and the US market in general.

Image Credit: Tesla Motors


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James Ayre

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.

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