The policies designed by the US federal government in a bid to promote electric vehicles (EV) will cost $7.5bn through 2019, according to a new report.
The US Congressional Budget Office report revealed that have 'little to no impact' on the whole national gasoline consumption over the upcoming years.
According to the report consumer tax credits for purchasing EVs, which can be as high as $7,500 per vehicle, will make up about 25%of the $7.5bn price.
The remaining cost includes $2.4bn in grants to battery makers and projects to promote EVs in addition to $3.1bn in loans to automotive firms designed to encourage production of fuel-efficient vehicles.
The report said: "The more electric and other high-fuel-economy vehicles that are sold because of the tax credits, the more low-fuel-economy vehicles that automakers can sell and still meet the standards."
Manufacturing EVs and plug-in hybrids is part of the automotive industry's solution to achieve strict fuel economy standards developed to cut emissions and reduce the country's dependency on oil.
The report also revealed that the US government standards mandate that by 2025, the automotive manufacturers have to demonstrate corporate average fuel economy (CAFE) of 54.5 miles per gallon or about 39 miles per gallon in real world driving conditions.
