obama drives chevy volt

Senate Democrat Max Baucus, the chairman of the finance committee, has scrutinized President Obama's proposal to convert the $7,500 tax credit for plug-in vehicles to a point-of-purchase rebate, according to Automotive News (sub. req.) and thinks there's a potential problem.

In February, Obama proposed changing the credit over to a point-of-purchase rebate, a move that would likely speed up the $7,500 payment. Under the proposal, dealers would reduce the sticker price of eligible plug-in vehicles and apply for reimbursement from the government.

That all sounds good, but Baucus fears that if dealers are required to give customers a $7,500 rebate at the point of purchase, the incentive could become muddled, with dealers mixing the rebate in with price reductions. This, according to Baucus, could confuse consumers and lead them to incorrectly think that they hadn't received the full amount of the $7,500 rebate.

Then there's another potential problem. Ryan Abraham, a counsel for the tax legislation panel, says that Obama's proposal might not provide enough incentive to potential electric vehicle (EV) buyers. Still, what's there should be safe, even in this era of budget cuts. Abraham claims that the current $7,500 EV tax credit, which began during the Bush administration, is safe for now, stating "I don't think members will have much appetite to repeal current law incentives."

[Source: Automotive News – sub. req.]