Obama administration wants rebate on electric cars

U.S. Transportation Secretary Ray LaHood told a group of Nissan executives and workers on Tuesday that the Obama administration wants consumers to be able to get a tax rebate at dealerships when they buy electric cars.

The federal government currently offers a $7,500 tax credit on the purchase of electric vehicles, but that can't be taken until buyers file their income taxes.

LaHood said he expects the change to be a part of any tax bill that is passed in the next year and a half.

He made the remarks during a tour of Nissan North America Inc.'s lithium-ion battery plant in Smyrna. When the plant is complete in late 2012 it will be the largest of its type in the nation, able to produce 200,000 batteries a year for the all-electric Nissan Leaf, which will be built next door.

The Leaf carries a manufacturer's suggested retail price in the U.S. of $32,780, much higher than most similar-sized, gas-powered cars. With the tax credit, the price is more like $25,000.
"We'd like for people to get a $7,500 rebate on the day they buy the Leaf," LaHood said, comparing it to the way the popular Cash for Clunkers program worked. Combined with state incentives, the rebate will allow people "to own a Leaf for what most average people can afford," he said.

He said the incentives could be in place "for as long as it takes to really motivate people to do this."

The idea could face opposition from the dealers, however. Bailey Wood, a spokesman with the National Automobile Dealers Association, said tax credits are a great way to incentivize sales, but the administration's proposal, which essentially seeks to transfer the tax credit to the dealer, would complicate the sales process. He said dealers might have to try to determine whether a buyer qualified for the credit, something that could be difficult.

LaHood also said the administration is committed to investing in charging stations so that the infrastructure is in place to make owning an electric vehicle as convenient as possible. The Leaf, the first mass-market all-electric car, can run for about 100 miles before the battery needs to be recharged. On a 220/240-volt outlet, it takes about eight hours to go from zero to fully charged, but a quick charge port allows the battery to charge to 80 percent in about a half hour.

When Bill Krueger, senior vice president for manufacturing, purchasing, supply chain management and total customer satisfaction for Nissan Americas, told LaHood that many of the first buyers of the Leaf are more concerned about the environment than saving money on gas, the secretary seemed surprised and intrigued.

"I believe the model they're using here is something I hadn't even thought about," he said. ..."They base the idea not just on $4.00 a gallon gas. They do want a cleaner environment, to clean the air up."