The U.S. President Barack Obama intends to boost government subsidies for buyers of the plug-in electric cars from $7,500 to $10,000 per buyer.
Under the proposal, the tax credit would apply to vehicles that operate primarily using an alternative to gasoline, as long as that technology is not currently widespread in the U.S.
The amount of the tax credit would vary by the fuel efficiency of the vehicle, but would be at least $7,500 for electric vehicles.
There would be a maximum $10,000 per vehicle through 2016, with no cap on how many vehicles it might apply to; that would drop to $7,500 in 2017, $5,000 in 2018 and down to $2,500 in 2019.
According to one budget document, the credit would be less for vehicles priced above $45,000 such as the Tesla Model S. That credit would be capped at $7,500.
Obama has called for a total of 1 million plug-in vehicles on U.S. roads by 2015, though that goal is viewed as a stretch by most industry analysts. The proposed budget repeats that goal.