Saturday, October 25th, 2014

Obama tax breaks give new juice for plug-in hybrids

Obama earned a Promise Kept for getting tax breaks for plug-in hybrids like this Toyota model.
Obama earned a Promise Kept for getting tax breaks for plug-in hybrids like this Toyota model.

As a candidate, Barack Obama promised to "leverage private sector funding to bring (plug-in hybrids) directly to American consumers. We'll give consumers a $7,000 tax credit to buy these vehicles."

This one was almost home before Barack Obama was even sworn in as president.

As part of the $700 billion Troubled Assets Relief Program, or TARP, that Congress approved last fall, a tax credit of up to $7,500 was offered to people who bought one of the first 250,000 plug-in hybrid or all-electric vehicles, the ultra-efficient cars not yet on the market. The plan was expected to cost the government about $1 billion.

The economic stimulus package signed by President Obama in February goes several steps further. Most importantly, it ups the limit of cars eligible for tax credits from 250,000 vehicles total to 200,000 per manufacturer, foreign or domestic. None of the big carmakers currently offer these highly fuel-efficient cars, but nine companies plan to in the next few years. That means the stimulus package could subsidize the purchase of some 1.8 million cars. The stimulus plan also includes tax credits for small electric vehicles, including two-wheel and three-wheel plug-ins, plus conversions for existing hybrids to become plug-ins.

For more details, see our Obameter item , which rated it a Promise Kept.