Recently, Representative Peter Welch of Vermont introduced
legislation restructuring the planned phase out for the current
electric vehicle $7500 federal tax credit. As has been discussed in
great detail in this
blog, the current electric vehicle incentives begin to phase
out individually for each manufacturer when that manufacturer
delivers its 200,000th electric vehicle. As a policy mechanism, the
federal electric vehicle tax incentives positively influence both
consumer and automotive manufacturer market behavior. When
implemented correctly, consumers will shift toward purchasing
eco-friendly electric vehicles and manufacturers will ramp up
electric vehicle research and development, ultimately leading to
higher production volumes. By combining the benefits to both
consumers and manufacturers, these incentives can build a trend
toward a growing and ultimately sustainable electric vehicle market
devoid of any external incentives.
