In early March, President Obama released a proposal which outlined several key changes to promote a broader use of hybrid and alternative power vehicles. This included higher tax credits for people buying hybrid cars and trucks, broadening the technologies which qualify for these credits, making it easier for buyers to benefit at the time of the purchase, and several other key changes. As always, it is impossible to predict what the outcome of this initiative will be, however it does lay the groundwork for the widespread adoption of hybrid vehicles among the general public.
The Current Problem With Hybrid Vehicles
This new proposal is designed to achieve two goals simultaneously. First, it will take steps to make hybrids more affordable during the initial purchase. Second, it will address common usability issues.
The biggest barrier that most people face when deciding between a hybrid and a fuel-efficient gas powered vehicle is that the hybrid is normally much more expensive. Even though the long-term cost savings of a hybrid have become well-established, is the initial investment which drives most people towards a fuel-efficient gas powered vehicle. Many experts argue that this is actually the largest barrier that hybrid vehicles will have to overcome in order to become widely adopted by the general public. Several aspects of the new proposal try to address this in different ways.
The second primary issue is that hybrids have some basic usability issues which have been created by our current transportation infrastructure. By doing things like adding more battery charging stations will not only increase public awareness, but also make owning an electric vehicle more convenient.
What Exactly Does This New Proposal Entail
To give you a better idea of what President Obama’s new proposal hopes to achieve, it is important understand each aspect and what it attempts to accomplish.
Increasing the Credit Per Vehicle
The first tenant of the proposal is increasing the existing credit per vehicle. Currently, you can receive a tax credit for up to $7,500 per vehicle for both businesses and consumers. He wants to increase this to $10,000. The goal of this change is to leverage the credits improve value to make the purchase price of a hybrid vehicle much closer to a high-efficiency gas powered vehicle.
Transfer the Credit to the Dealer or Financier
Another important change is that this credit could be given directly to the dealership or playing institution which is financing the purchase. The benefit to this change is that the initial purchase price would be much closer to a traditional vehicle. Currently, you will get the credit for purchasing a hybrid at the end of the tax year when you file your taxes. This means that you are still paying a much higher price when making the initial purchase. By transferring the credit to the dealership or lending institution, they can keep you a lower initial purchase price which will make hybrids immediately more affordable.
Improve Existing Transportation Infrastructure to Promote the Use of Hybrids
A common reason that some people immediately overlook purchasing a hybrid car is because it can be in convenient to use on a regular basis, especially for long trips. In fact, some car manufacturers are trying to make it more affordable to purchase an individual battery charging kit because they realize that the current infrastructure doesn’t broadly support hybrids. The new Obama proposal would provide significant funding to cities so that they can start upgrading their transportation infrastructure by doing things like building public battery charging stations. If there were more of these stations readily available, many more people would consider driving a hybrid. As an added bonus, simply making the stations more visible would increase the awareness of hybrids in the general population.
What Does the Future Hold?
It is impossible to predict whether or not this initiative will ever pass, however it does continue to provide hope that hybrids will soon be a much more realistic option for the average car buyer. The initial purchase price of hybrids is likely to be the primary barrier to their widespread adoption. Taking steps to make them more economically competitive will level the playing field and allow the average person to realistically consider them as a viable new car option.