US Government Is Ready To Give You Money As Incentive For Going Electric

President Biden is pushing to get the US to reduce carbon emissions in any way possible. He stood on a platform to fight climate change. During the Presidential campaign, he suggested that rebates and/or tax incentives would be addressed. Now it looks like the US government is ready to give you money for going electric. “We’re going to provide tax incentives and point-of-sale rebates to all American families,” Biden said Wednesday.

Last year electric sales went from 3% to 2% so the numbers are trending down

Cash for Clunkers
A painted Dodge Ram Van advertises the federal “Cash for Clunkers” program August 21, 2009 in Las Vegas, Nevada | Getty

You may not have been too inclined to get rid of your gas-burning car or truck. But maybe you would consider it if there was some money behind it? An electric incentive. Something needs to change because sales of electric vehicles in the US are stagnant at between 2-3 percent. In fact last year it went from 3% to 2% so the numbers are trending down. 

But the challenges are high and that is why Biden wants this to happen sooner rather than later. If only EVs were sold starting this year it would still take almost 15 years to be rid of all ICE vehicles. Right now the average age of vehicles in the US is 12 years. So people are keeping their cars and trucks longer than in years past.

“If you don’t start somewhere, you’re never going to get anywhere,” Bruce Belzowski, a retired U of M transportation researcher told Autoblog. “Every electric vehicle that you sell is going to be net positive for the environment.” 

Congress is looking to raise the cap to 600,000 EVs per manufacturer

Cash for Clunkers
A Ford car dealer offers the “Cash for Clunkers” program to customers on August 7, 2009 | Getty

RELATED: We Can Do Better Than “Cash For Clunkers” Redux To Stimulate Car Sales

The vehicle tax credit is the most likely starting point. In effect for the past few years, it has a cap of 200,000 vehicles per manufacturer. GM and Tesla have already hit that cap. So the incentive to purchase an EV from those manufacturers is gone. And Nissan is closing in on that number. So Congress is looking to raise the cap to 600,000 vehicles per manufacturer. 

And besides allowing for manufacturers to reduce the price of EVs there would also be a $1,250 tax credit going to the buyer for a used EV. But some in Congress want even larger amounts of electric incentives for consumers. Some are looking to revive the “Cash For Clunkers” program that was used in 2009. It offered up to $4,500 in rebates to turn in your old car to purchase a new one. 

Congress is looking to ramp up EV sales in incremental steps. About 380,000 EVs will be sold in 2021. But Congress would like to see that number increase to one million by 2023. And by 2030 it would like to see that number hit four million vehicles. 

It is estimated manufacturers spent almost $200 billion on electric development

Cash for Clunkers
“Cash for clunkers” program at the David O’Neal Chrysler Jeep Dodge | Getty

With the amount of money and development invested by manufacturers into EV vehicles, one would hope for better numbers than 380,000. It is estimated that manufacturers have spent almost $200 billion so far. That number will go up to $255 billion by 2023. 

A consortium of manufactures that includes GM, Ford, Toyota, and the UAW, has asked Biden for help. It wants him to help address the difference between the cost of ICE vehicles versus the cost of EVs, which is higher. It wants to see tax credits, research spending, and the US Government invest in replacing the federal fleet with EVs.