A $16.9 billion renewable energy and fuels tax incentive package that includes a first-ever $3,000 credit for purchase of plug-in hybrid vehicles, has made it through the House Ways and Means Committee and is headed for the floor.

The credits are part of a $50 billion tax package.

Among the provisions are a $1.01 per gallon production tax credit for cellulosic ethanol – made form non-edible waste and plant material – and a reduction of the present ethanol blending credit to 45 cents a gallon from 51 cents. Those same credits and reductions are in the Farm Bill that has passed through congress and is on the way to the White House.

The tax measure would increase the credit for installation of E85 ethanol fuel pumps to 50 percent of cost, up from 30 percent, and establishes tax incentives worth $1.4 billion  for coal power and gasification projects aimed at capturing and reusing or sequestering carbon emissions.

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United Parcel Service has ordered 200 hybrid electric trucks and 300 compressed natural gas vehicles from Daimler as it seeks to make its delivery fleet more fuel efficient.

Daimler said the order represents the largest ever placed for "green" commercial vehicles. Retail value of the trucks has been estimated at $50 million.The chassis will be supplied by Daimler's Freightllner subsidary, the hybrid systems by Eaton Corp.

In addition to helping UPS  "green" its fleet and cut its fuel bills, use of the trucks throughout the U.S. fleet could help spread awareness of alternative fuel and hybrid vehicles.

The hybrid delivery trucks, which combine a diesel engine and electric motor, achieve 40 percent improvement in fuel economy and a 90 percent reduction in emissions compared to non-hybrid UPS vehicles, Daimler said.

The CNG trucks produce about 20 percent less carbon dioxide and other emissions than diesel-powered trucks.

The vehicles will be used by UPS for daily delivery operations across the United States and will function in concert with the package service's fleet of conventional diesel vehicles, UPS said in a statement.

The 200 hybrid electric vehicles, which will be deployed next year, are expected to save 176,000 gallons of fuel annually. The 300 CNG trucks  will enter service later this year.

The order will raise to 2,218 -- slightly more than 2 percent -- the number of low-carbon vehicles in the 93,000-truck UPS fleet.

Scott Doggett, Contributor

In the latest battle in the ongoing war over states' rights to set automotive emissions rules, Arizona lawmakers this week sent a bill to Gov. Janet Napolitano that would prevent her from adopting California's clean-car regulations for her state.

House Bill 2017, which the Democratic governor has said she'd veto, also would block Arizona's participation in the Western Climate Initiative. The initiative, adhered to by seven states and two Canadian provinces, seeks to bring regional greenhouse-gas emissions down to 15 percent below 2005 levels by 2020.

Napolitano brought Arizona into the WCI last year, and last month a gubernatorial review council approved a state agency's plan for Arizona to adopt California's vehicular emissions standards, which are more stringent than those proposed by the federal government.

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By John O'Dell, Senior Editor
 
It was a Lexus in the sky, with carbon, and it is causing Paul McCartney and Lexus no end of grief.
 
The former Beatle was given a Lexus by Toyota Motor Corp. for his help in promoting the raaather posh and expensive Lexus LS600H. In Great Britain, the hybrid costs the equivalent of $165,000.
 
Sir Paul, as the Brits like to call the knighted entertainer and environmental activist, asked that the leather upholstery be stripped out and replaced with cloth (he's an animal rights supporter and a vegan).
 
Then Lexus loaded the car, which also has a special paint job, onto a Korean air jet and flew it to Britain.
 
The British press is having a field day, going on about how that flight created a carbon footprint almost 100 times larger than if the car had been shipped by sea, as is usual.
 
The Telegraph, for instance, quotes an unidentified source in its story as saying McCartney will be "horrified after learning it was delivered by plane."
 
The paper says that a carbon-offset company, CO₂balance.com, said the plane flight "caused a carbon footprint of 38,050 kilograms [23,591 pounds] compared to 397 kg [246 lbs.] for a three-week boat journey."
 
McCartney hasn't said anything, but Nancy Hubbell, a Lexus spokeswoman at the company's North American headquarters just south of Los Angeles, called it a case of mistaken assumptions.
 
"It was a scheduled flight, so the carbon footprint was there whether we shipped the car or not," she said, adding that McCartney shouldn't be shocked or horrified as the decision to ship the car by air "was a joint one."
 
Lexus and McCartney's people jointly decided to do the air shipment to help protect the expensive paint and to speed delivery to fit into Lexus' plans to use the car in several upcoming promotional events in Britain, she said.
 
But even had the car come by boat, there still would have been grumbling.
 
The Telegraph quotes a spokesman for the anti-aviation lobby Plane Stupid complaining that "for anyone to pretend that a private limousine is in any way eco-friendly is like pretending a private jet is. It's total greenwash."
 
McCartney and Lexus have a long relationship stemming from the carmakers' sponsorship of his 2005 U.S. tour. The singer has publicly lauded Lexus for making hybrids because they use less fuel -- and have a reduced carbon footprint.

New battery pack is stacked atop standard Prius battery to show size difference.

By John O'Dell, Senior Editor

Building a better battery is no easy chore -- witness the scramble going on right now to prefect  batteries for plug-in hybrids and extended range electric vehicles such as the upcoming Chevrolet Volt.

There are a host of issues to tackle including weight, safety, power and energy density,  and, of course cost.

So there ought to be a maket for a hybrid vehicle battery that's lighter, cheaper and safer than the kind presently in use. 

Squiler says his Southern California company has one.

A World's-First

It's a nickel zinc battery, NiZn for short and not to be confused with NiMH, for nickel metal-hydride,  the standard today for hybrid-electric vehicles while the auto and battery industries are hard at work perfecting lithium ion batteries to replace them.

But lithium ion batteries, while lighter and more powerful, is a lot more expensive than nickel metal hydride, and that has given Squiller's compnay  a wedge it  hopes will make it a big player in the battery biz.

PowerGenix, an 8-year-old San Diego company that started selling its first batteries – for cordless power tools – just last month, says it has developed the world's first rechargeable nickel-zinc batteries suitable for hybrid-electric vehicle application.

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Toyota's Prius is top hybrid in the world with more than a million sold so far.

Over the years, automotive industry analysts repeatedly have pondered the question of just what the gas-price tipping point might be.

 For a while it was thought, based on focus groups, surveys and gut feelings, that people wouldn't change their car-buying habits until gas hit $3 a gallon. Then it was $4 and some even said it would take $5 a gallon gas to do the trick.

Well, it seems that $3.60 did the trick.

 As gas prices hit that mark in early April, small car and hybrid sales began soaring. As we reported earlier, both segments captured record shares of the U.S. new vehicle sales market for the month.

Toyota's Prius, synonymous with "hybrid" for many people, was not only the top-selling hybrid but the eighth-best selling passenger car overall for the month.

Now Edmunds AutoObserver brings us news that Toyota has announced that the Prius sales motored proudly past the million-mark in April, hitting a global total of 1.028 million – and climbing.

Success like that is likely to spur Toyota's decision-makers to give a big green light to a project they've been discussing publicly for months now – an expanded line of Prius models.

John O'Dell, Senior Editor

If a $2,500 car from India isn't enough for automakers to worry about, Tata Motors now says it will develop an all-electric vehicle to compete in the upcoming automotive X-Prize competition.

The contest, underwritten by Progressive Insurance, is offering a $10 million purse to contestants who can come up with a new car that is suitable for mass production and can achieve fuel economy equivalent to 100 miles per gallon or better. Entrants also have to have a business plan for making and marketing their vehicle.

Organizers hope the competition will showcase viable alternatives to the internal combustion engine as well as technologies that improve ICE performance and reduce emissions.

Tata, best known for the four-seat Nano "people's car" that it introduced at the New Dehli auto show earlier this year and has said will sell for the equivalent of $2,500, actually plans to enter two vehicles in the Progressive Insurance Automotive X-Prize competition, the Santa Monica-based X-Prize Foundation said this morning.

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We don't intend to make a habit of writing about every twist and turn in the Tesla vs. Fisker trade secrets lawsuit, but because of the high level of interest in both of the electric car companies thought we ought to let you know that Fisker is seeking to toss the whole thing into arbitration.

That would take the case out of the courtroom, limit public access and likely result in a sealed settlement. It also could save both sides considerable time and, possibly, money.

Tesla would not comment when contacted today.

Southern California-based Fisker Automotive filed its arbitration request Tuesday in a Northern California court, near Tesla Motors Co. headquarters.

A court hearing has been scheduled for June 11.

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Electric car maker Tesla Motors Co. , already eyeing a public offering, said it has appointed a prominent Silicon Valley business attorney to its board.

The new Tesla director, Larry Sonsini, was involved in the initial public offering of Google and the merger of Hewlett-Packard with Compaq.

Tesla executives have said that the company, supported so far by private investment capital, is likely to float a public offering this year or next. Tesla Chairman Elon Musk also has talked about forming a strategic alliance with a major automaker to help facilitate development of a compact, affordable electric or hybrid-electric sedan.

The Northern California company is noted for designing and recently launching production of the $100,000 Tesla Roadster, a battery-powered electric sports car. It also has announced plans to launch a $50,000 electric or hybrid-electric sedan, code-named the White Star, in 2010, with the third vehicle, the compact car, to follow.

All of that takes cash, lots of it.

With the U.S. economy faltering, Tesla has speeded up plans to introduce its roadster in the European market. While the company says that its first year of production for the U.S. is sold out, it is looking ahead and, apparently, hoping demand in Europe will either add profitable new volume or offset any future slackening of U.S. demand.

John O'Dell, Senior Editor

Big news on the Volt front.

GM's Bob Lutz has told Edmunds.com's Michelle Krebs that on-street testing of the series hybrid powertrain for the much-anticipated Chevrolet Volt has finally begun and that the Volt team is now aiming at a November, 2010, launch for the game-changing vehicle.

Lutz also said that in the test mule – a modified Chevy Malibu – the gas-electric plug-in powertrain is hitting GM's goal of providing 40 miles of all-electric travel before the gasoline-burning internal combustion engine kicks in to do its job of generating more electricity to keep the Volt running at full power.

The Volt, first introduced as a concept at the 2007 Detroit Auto Show, will use a lithium ion battery pack to store and provide juice for the electric drive motor. The gas engine is there only to generate electricity when the initial battery charge – obtained by plugging-in to the commercial electrical grid overnight – is depleted.

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