Bailout boosts plug-in vehicles
The pork barrel has gone high-tech.
Generous tax credits for buyers of plug-in electric vehicles were among the incentives larded into the Wall Street bailout package this month to ensure its passage by Congress. Buyers will be eligible for a tax credit of up to $7,500 based on the power of their batteries.
Many environmentalists see the vehicles as the next big advance in fuel economy. Unlike hybrids currently sold in the U.S., plug-in vehicles will be able to travel considerable distances on electric power alone, with a gasoline engine or gasoline-powered generator providing backup power when the battery is depleted.
The vehicles have required costly development of a new generation of lithium-ion batteries. GM’s Chevy Volt, slated to be in showrooms by November 2010, is expected to cost $30,000 to $40,000.
Supporters say the tax break will help defuse potential sticker shock.
“These kinds of tax credits will make it more attractive to an early adopter to put one of these vehicles in their garage,” said GM spokesman Dave Barthmuss. The plug-in tax credits will be available on vehicles sold from Jan. 1, 2009, until the end of 2014.
Vehicles with batteries of at least four kilowatt-hours will qualify for a $2,500 credit. An extra $417 credit is provided for each additional kilowatt-hour, with a maximum credit of $7,500 for a vehicle weighing less than 10,000 pounds.
(Unlike a deduction, which lowers the amount of a person’s income subject to taxation, a credit reduces the taxes owed on a dollar-for-dollar basis. In other words, a $2,100 tax credit is like getting a delayed $2,100 discount on the price of a car.)
Barthmuss said the Volt apparently will qualify for the full credit. GM is also planning a plug-in version of its Saturn Vue hybrid, Nissan is developing an electric car for the U.S., and Toyota expects to put plug-in hybrid vehicles in the hands of fleet operators by late 2009.
The $100,009 electric Tesla Roadster also appears to qualify for the full credit, but only for those sold starting in 2009.
The tax credits begin to phase out after 250,000 qualifying vehicles are sold industrywide in the U.S. Only new vehicles are eligible, so existing gas-electric hybrids that have been converted to plug-in operation won’t qualify for the credit, said Genevieve Cullen, vice president of Electric Drive Transportation Assn., which represents utilities, battery makers, car companies and others with skin in the plug-in game.
--
martin.zimmerman@ latimes.com
--
latimes.com
/uptospeed
Log on for the latest auto news tips and trends.
