President Barack Obama has proposed to spend $3.7 billion toward new tax credits for electric vehicles, and another $1 billion to progress the deployment of advanced-technology vehicles

The Obama administration is looking to spend a total of $4.7 billion on new tax credits for electric vehicles (EVs) and for a speedier deployment of advanced-technology vehicles.

President Barack Obama has proposed to spend $3.7 billion toward new tax credits for electric vehicles, and another $1 billion to progress the deployment of advanced-technology vehicles in about 10 to 15 communities. EVs aren’t the only technology to get a boost -- the proposal aims to lump natural gas, electrification and other alternative fuels together in the same category.

To break it down further, Obama wants to spend $2 billion to increase the EV tax credit from $7,500 to $10,000 and to turn it into a point of sale rebate. The $10,000 would be applied to vehicles that are at least 25 percent efficient than government goals. Obama wants to expand the tax credit to other kinds of advanced vehicles and reform the credit for EVs so that it's no longer strictly based on the size of the battery. As for the other $1.7 billion, Obama wants to make a new credit for commercial truck buyers where they receive credit for half of the extra costs of an advanced-technology vehicle.

The $1 billion used for EV and advanced-technology vehicle progress in 10 to 15 communities will aim to boost EV adoption. Obama originally proposed a goal of putting 1 million plug-in and electric vehicles on U.S. roads by 2015, but that goal has been difficult to meet. Demand for and adoption of EVs has slowed considerably in recent months, and Obama is looking to increase that demand.

"To cities and towns all across the country, what we're going to say is, if you make a commitment to buy more advanced vehicles for your community -- whether they run on electricity or biofuels or natural gas -- we'll help you cut through the red tape and build fueling stations nearby," said Obama. "We're going to give communities across the country more of an incentive to make the shift to more energy-efficient cars."

The proposal also wants medium and heavy duty trucks to improve efficiency by 20 percent by 2018, which is expected to add about $8 billion to the cost of vehicles yet offer $49 billion in benefits.

"The economic recovery is not only working in the domestic auto industry," said Bob King, United Auto Workers (UAW) president. "It's in other areas as well, such as heavy truck assembly and parts."

The proposal will likely face some criticism, considering the fact that EVs have significantly slowed in demand and other alternative energy ventures have failed. Last year, General Motors experienced some trouble with its Chevrolet Volt plug-in hybrid electric vehicle, which experienced a series of battery fires through different National Highway Traffic Safety Administration (NHTSA) tests. The situation put a lot of bad light on the Volt, and sales dropped in early 2012. Just last week, GM announced that it would halt production of the Volt for five weeks because of decreased demand.

Other EV troubles include the failure of Indiana's Think City EV plant, which contains 100 unfinished Think City cars waiting to be completed but can't. Also, Fisker Automotive had battery issues and a recall last year on its Karma plug-in hybrids, and EV battery maker Ener1 filed for bankruptcy in January 2012 after receiving a $118 million Department of Energy grant in August 2009.

Sources: The Detroit News, The White House

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