Buy a car, get a check. It worked for Chrysler, three decades ago, when the maker introduced the idea of rebates in an effort to boost lagging sales. Now, the federal government – and more than a dozen states – are using the same tactic hoping to convince American motorists to switch from conventional powertrain technology to advanced battery vehicles.
The $7,500 federal tax credit is a significant chunk of cash, with a vehicle like the Nissan Leaf reducing its list price by nearly a quarter. Lawmakers wisely placed limits on the number of battery car buyers can claim the subsidy – and how long the program will operate – to avoid bankrupting an already deficit-plagued Treasury.
But even when such government-funded sales incentives vanish, battery cars could place a serious strain on both federal, state and, in some cases, local government tax coffers by cutting off a steady and lucrative source of tax revenues, gasoline excise taxes. That means, in years ahead, lawmakers may be forced to enact new taxes specifically aimed at battery car owners.