Get ready for a different type of government incentive.
Aside from state tax incentives of varying amounts, there's been a $7,500 federal tax credit for a few years now. Both General Motors and Tesla have already exhausted their allotted 200,000-credit ceilings. Both automakers are pressuring the Biden administration to reinstate them as part of a greater effort to entice more Americans to buy electric vehicles. But here's the kicker: mainly only wealthy consumers have been able to take advantage of that federal credit because EVs are expensive to begin with.
The Tesla Model 3, the company's cheapest model, begins at $35,000, though that's below the estimated average new vehicle transaction price of $40,857. The Porsche Taycan starts at $80k. More affordable EVs are on the way and the government wants to entice consumers with a new initiative.
Bloomberg reports the Biden White House wants to provide consumers point-of-sale rebates for purchasing EVs. An interview with White House Climate Advisor Gina McCarthy revealed that plan. "He's looking at actually providing consumer rebates at the point of sale," she said.
Point-of-sale rebates, as the name suggests, will be instant so buyers won't have to wait until the end of the year to receive their tax rebate. Not everyone can afford to wait that long. Another important reason for the new rebate is to place the country in a better position to compete with China, currently the world's biggest automotive market and the largest for EVs in terms of unit sales.
"The president is concerned that China is far ahead of us in the electric vehicle market," McCarthy said. "Instead of producing the technologies of the future, we are importing them from somewhere else."
No timeline was given regarding when the new rebate program will get underway, as it'll form part of Biden's proposed $174 billion EV infrastructure plan that's receiving plenty of opposition from numerous lawmakers in both houses of Congress. Earlier this month, the president threatened to pass the bill without Republican support.