This week, the White House announced a plan to help convince car shoppers to buy an electric vehicle. During President Obama’s State of the Union address, Obama said he wanted one million electric vehicles on U.S. roads by 2015.
Shoppers are weary though, especially since the technology is new and the vehicles are more expensive. The Obama administration wants to help consumers by offering a $7,500 rebate that is applied at the time of purchase. This would replace the current $7,500 federal tax credit, which is applied when you file your taxes and depends on your income and other tax credits and deductions. The $7,500 is the maximum amount of the rebate and most buyers won’t receive the full amount.
The $7,500 rebate being proposed would instantly lower the price of the electric cars. Dealerships would file a tax credit claim, Cars.com reports, so they can be reimbursed by the government.
Although there has been a lot of interest in the new electric vehicles, like the Chevrolet Volt and Nissan Leaf, sales of hybrid and electric vehicles have been slow to catch on to U.S. car shoppers. According to Experian Automotive, hybrid vehicles have made up only a small portion of U.S. vehicle sales the past few years.
The highest percent of market share hybrid vehicles had was during the third quarter of 2009, which was also the same time as the government cash for clunkers program. Hybrid vehicle sales peaked during this time, totaling a little more than 3 percent. In the third quarter of 2008, hybrid sales totaled 2.2 percent of all vehicle sales. During the third quarter of 2010 hybrids totaled 2.4 percent.
In the hybrid category, most of the vehicles sold are hybrid cars. Hybrid trucks only make up less than 0.5 percent of the total vehicle market share.
So which cars are hybrid shoppers buying? In the third quarter of 2010, the Toyota Prius accounted for almost two-thirds of all hybrid sales. The other third included sales of the Honda Insight, Toyota Camry Hybrid, Ford Fusion Hybrid, Honda CR-Z and other hybrids. Experian Automotive said that these numbers will change when the Chevrolet Volt and Nissan Leaf fully hit the market.
Would a $7,500 government rebate convince you to consider an electric vehicle? Both the Volt and Leaf are being offered with a discounted lease incentive for shoppers who aren’t ready or prefer not to buy.