Congressional Budget Office Says More Electric Car Subsidies
Tax and rebate have helped many buy electric cars, but will more incentives drive a wider mass adoption of electric cars?
The Congressional Budget Office, CBO has recently released a report saying we need to more than double subsidies in order to make electric cars cost competitive.
The Congressional Budget Office estimates that federal policies to promote the manufacture and purchase of electric vehicles will have a budget of about $7.5 billion through 2019. One fourth of that budget goes to tax credits for buying electric vehicles, and according to the CBO are likely to have the greatest impact on vehicle sales. The CBO defines electric vehicles as Plug-in hybrid vehicles powered by an internal combustion engine that can run on gasoline or other fuel that feed an electric motor powered in part by an externally rechargeable battery, the rest is All-electric vehicles, also known as battery electric vehicles that run entirely on battery power.
CBO Feels EVs Too Expensive. The CBO’s calculations are based on today’s energy prices and feels at the current electric vehicle and energy prices, the lifetime costs are generally higher than those of a conventional vehicle or traditional hybrid, even with the tax credits. What this seemingly fails to address is the ever-rising price of petroleum.
With this logic, an average plug-in hybrid vehicle with a 16 kWh battery pack is eligible for the maximum tax credit but would require more than $12,000 to have roughly the same lifetime costs as a comparable conventional or traditional hybrid vehicle.