Obama proposes bumping Chevy Volt subsidy up to $10K
President Barack Obama is touting a new series of green-tech subsidies in North Carolina Wednesday, simultaneously trying to goose his prospects in the swing-state and to jump-start his stalled plan to minimize the nation’s use of gasoline.
The new subsidies include an expansion of the $7,500 subsidy for the wealthy buyers of the Chevy Volt.
If Congress approves Obama’s proposal, the government will be giving $10,000 in taxpayer money to people wealthy enough to buy novel green-tech autos that are powered by batteries or natural-gas.
The new $10,000 credit, according to a White House statement, should “be applied to additional types of technologies, not currently covered.”
The average household income of Chevy Volt buyers is $170,000. White House officials did not estimate the total cost to taxpayers of the proposed subsidy, which will also be given by buyers of commercial trucks.
Obama also announced a new tax break to spur purchase of trucks powered by natural gas when he visits a factory run by Daimler Trucks North America in Mt. Holly, N.C. “This incentive… drive[s] up demand for the sorts of vehicles built at Freightliner’s Mt. Holly Plant and, in turn, spur[s] job creation in the American manufacturing sector,” said a press release.
The visit and the subsidies may help Obama gain ground in North Carolina, which he won by 0.3 percent in 2008.
However, his poll numbers in the state remain well below 50 percent, and the state party is in disarray because three top Democrats — including Gov. Bev Perdue — have announced they will not run in 2012.
His efforts to launch a new, post-gasoline energy sector have stalled, in part, because several taxpayer-funded green-tech companies have collapsed. Several others have laid off workers. (RELATED: Bankrupt energy firms get millions in tax dollars, execs receive large payouts)
This month, General Motors announced a temporary halt to production of the Chevy Volt after disappointing sales.
White House spokesman Jay Carney ignored the production halt when asked by reporters about the subsidy while en-route to North Carolina
“It is simply a fact that these technologies are going to be developed somewhere, and where they are developed there will be good jobs associated with the development of those technologies,” Carney said. “The President is absolutely committed… to ensuring that we do not, in the United States of America, simply throw up our hands and cede the industries of the future to other countries.”
Also, green-tech investors are increasingly cautious, fearing that an Obama defeat in 2012 would end subsidies and wipe out their prospects for profit. (SEE ALSO: GM suspends production of Chevy Volt after disappointing sales)
Obama’s promised subsidy for the trucks may not be needed.
That’s because an increasing number of trucking companies are already looking to use natural gas because it is a cheaper fuel than gasoline.
The low price is caused by energy companies’ “fracking” technology that has unlocked vast quantities of natural gas across the United States. Natural gas prices are so low that the new fuel has jump-started growth in the nation’s manufacturing sector and forced the shutdown of older, less-efficient natural gas wells.