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Funding change: $42,000 tax credit for the Tesla Roadster?

Funding change. Are tax credits the best approach to pushing more consumers into hybrid cars and other fuel efficient technologies?But only in Colorado

The majority of American auto consumers, according to several studies, are interested in hybrid cars and plug-in vehicles. Unfortunately, however, most interested in such vehicles are not willing to pay much extra for those vehicles.

Thus, federal and local governments have created tax credits to help offset the extra costs of these vehicles.

The latest example is Colorado where state residents can receive a credit on their 2009 income taxes for up to 85% of the difference between the cost of an alternative fuel or hybrid vehicle. Consequently, Roadster consumers could save more than $42,000.

While I like the idea of this 85% credit, helping someone save $42,000 on a Tesla Roadster seems absolutely ridiculous. For $42,000 you could convince 14 Toyota Camry buyers to go hybrid with a $3000 tax credit. That seems like a lot more bang for the buck.

Anyway, today, most federal tax credits for purchasing hybrids and other clean vehicle technologies have expired. Still, the government is spending tens of billions of dollars to help automakers to become more efficient, while rolling out new CAFE rules.

Fine. But, if you really wanted an efficient, transparent plan for increasing US fuel economy, wouldn’t several years of consumer tax credits for alternative vehicles be the best approach (since a gas tax probably has no chance)? Wouldn’t that create the kind of competition that might actually force automakers to become, well, innovative?

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admin on November 2, 2009 | Cars |