CBO Discusses the Effects of Tax Credits for Electric Vehicles at Energy Conference
...The federal government provides tax credits to buyers on each purchase of new plug-in hybrid vehicles (electric vehicles with an externally rechargeable battery that are powered, in part, by gasoline) or all-electric vehicles (electric vehicles that run entirely on battery power)....At current vehicle and energy prices, the lifetime costs to consumers of an electric vehicle are generally higher than those of a conventional vehicle of similar size and performance, even with the tax credits, which can be as much as $7,500 per vehicle. That conclusion takes into account both the higher purchase price of an electric vehicle and the lower fuel costs over the vehicle's life. The additional tax credit that would be required for electric vehicles to be cost-competitive with other vehicle options is smaller for electric vehicles that have small batteries or that are substituting for vehicles with low fuel economy.
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