Incentives Watch: It’s Electric!

Judging by news reports, it would appear that electric vehicles have been embraced by both policymakers and consumers. Some lawmakers have looked to the cars as a means of responding to the threat of global warming and the need to wean the United States off foreign oil. Electric vehicle tax credits and incentives are offered by a number of states, including Arizona, California, Colorado, Maryland, Oregon, Pennsylvania, Rhode Island, South Carolina, and Utah.  Doubts over whether consumers could love them might have been allayed after the Chevrolet Volt was named the 2011 North American Car of the Year at the Detroit Auto show last year.  

But some state electric vehicle rebate programs aren’t attracting as many consumers as might be expected. For example, Tennessee's electric vehicle incentive program now makes the Chevrolet Volt eligible for a rebate, in addition to the Nissan LEAF. Fewer people have taken advantage of the program than was originally expected, according to an article in The Knoxville News Sentinel.

At of the end of 2011, Tennessee had issued only 228 rebates for Nissan LEAFs, which left $1.93 million out of $2.5 million, in the state’s fund. For more information, check out Anne Paine’s article in The Tennessean. For more information about Tennessee’s electric vehicle rebate program, check out the Tennessee Department of Economic and Community Development’s website. 

Interestingly, President Obama plans on reducing our oil consumption by $2.5 million barrels of oil per day, by 2020, in order to get consumers to purchase more electric vehicles in the United States, according to a NAFA Fleet Management Association press release.   

Going, Going, Gone . . .

Indiana had high hopes for the electric vehicle industry, but those hopes have dissipated, according to an article in The Republic by Julie Wernau. Both the federal and state governments had high hopes for the industry, and even provided incentives to back it up, but, as it turns out, consumers weren’t that interested in paying top dollar for these small electric cars.

Despite the lack of consumer enthusiasm for electric vehicles in certain areas, other states continue to provide incentives for electric vehicle purchases. Hawaii recently expanded its electric vehicle rebate program by adding $150,000 in available funds to the program. The program’s end date has also been extended to March 31. In the past year, the state has issued 528 rebates, 318 of which were for electric vehicles and 210 for chargers. For more information about the program, check out the Hawaii Governor’s news release.  

However, the fate of the electric vehicle industry will depend on just how popular electric cars become with consumers, as well as how high the price of oil goes up in the future.

In other developments . . .

In Oregon, a new credit for the certified costs of a renewable energy resource equipment manufacturing facility went into effect last year. A renewable energy resource equipment manufacturing facility includes any building or equipment used to manufacture electric vehicles or component parts of electric vehicles. For more information about the credit, check out the Bloomberg BNA Weekly State Tax Reportarticle here.

By: Kathleen Caggiano