Obama to propose electric vehicle rebate plan

By Andrew Restuccia - 02/08/11 02:44 PM ET

President Obama’s budget request will call on Congress to pass legislation offering consumers a rebate of as much as $7,500 for purchasing electric vehicles.

The rebate plan is part of a three-part proposal outlined by the Department of Energy Tuesday that will be included in Obama’s budget request, slated to be released Monday. The proposal is designed to reach Obama’s goal of putting 1 million electric vehicles on the road by 2015.

The electric vehicles rebate proposal is modeled after the successful “cash-for-clunkers” program, which gave consumers rebates for exchanging older vehicles for more fuel-efficient ones. Obama will propose turning a current $7,500 tax credit, which would be redeemed on consumers’ income taxes, into a rebate, which would be received at the point of sale.

Asked how soon the program could get off the ground, Energy Department assistant secretary David Sandalow said the proposal is subject to Congressional approval.

“We’re going to need people from all parts of the spectrum to come together here and I think we can do it,” he told reporters Tuesday.

Here are the details of the proposal, via a statement from the Department of Energy:

* "Make electric vehicles more affordable with a rebate up to $7,500: The President is proposing to transform the existing $7,500 tax credit for electric vehicles into a rebate that will be available to consumers immediately at the point of sale, instead of having to wait for tax returns to be filed."

* "Advance innovative technologies through new R&D investments: Building on Recovery Act investments, the President’s FY2012 budget proposal will include enhanced R&D investments in electric drive, batteries, and energy storage technologies."

* "Reward communities that invest in electric vehicle infrastructure through competitive grants: To provide an incentive for communities to invest in EV infrastructure and remove regulatory barriers, the President is proposing a new initiative that will provide grants to up to 30 communities that are prioritizing advanced technology vehicle deployment."