House Passes Bill That Would Give Buyers of Volt, Other Plug-Ins $5,000 Tax Credit
Right, support for the bill by district.
By Scott Doggett, Contributor
Buried in H.R.6899 -- the Comprehensive American Energy Security and Consumer Protection Act -- that the U.S. House of Representatives passed this week is Sec. 824: Credit For New Qualified Plug-In Electric Drive Motor Vehicles.
More than a couple of bloggers that apparently didn't read the bill have incorrectly reported how the legislation, which still must go before the Senate and the president, would benefit initial buyers of the Chevy Volt plug-in hybrid.
Here are the facts, ma'am:
First, the amount of the tax credit is not limited to Volt buyers. It would apply to "any new qualified plug-in electric drive motor vehicle."
The proposed tax credit consists of a base amount and a battery-capacity amount. The base amount is a flat $3,000.
The battery-capacity amount varies. In the case of a vehicle that draws propulsion energy from a battery with not less than 5 kilowatt hours (kWh) of capacity, add $200 to the base amount.
Next, add $200 for each kilowatt hour of capacity in excess of 5 kWh. However, the battery-capacity amount is limited to $2,000.
At the heart of the Volt is a 16-kWh battery pack, which means the Volt owner would qualify for all $2,000 of the battery-capacity amount. Add that to the $3,000 base amount and the Volt owner earns a federal tax credit of five grand.
The tax incentive would be limited to the first 60,000 buyers.
Meanwhile, the Senate Energy and National Resources Committee is considering legislation that would make up to $7,500 in tax credits available to buyers who purchase a plug-in vehicle that has at least 6 kWh of electric power capacity.
To put the $5,000 the House passed and the $7,500 the Senate might vote on in perspective, consider that Americans who purchased a second-generation Prius for the first nine months of 2006 received a $3,150 tax credit from Uncle Sam for buying a hybrid-powertrain vehicle.
From October 1, 2006, through March 31, 2007, the tax credit was $1,575; and from April 1, 2007, through September 30 of that year, the tax credit was $787. People who purchased a Prius after October 1, 2007, were ineligible for a tax credit.
Under the House bill and the legislation the Senate is working on, Toyota would get the shaft.
The Prius features a nickel-metal hydride battery pack with just 1.3 kWh of energy. Even when it appears in a plug-in model, which is planned, the battery pack likely won't store significantly more energy than 1.3 kWh.
As a result, the battery-capacity amount in the House bill would fetch a much larger tax credit for Volt buyers than plug-in Prius buyers -- and the bill being worked on in the Senate would give the Chevy an even greater advantage (a $7,500 advantage, potentially).
These facts are not lost on the Japanese automaker. As General Motors executives celebrated the company's 100th anniversary, Toyota's Robert Wimmer testified on Capitol Hill for legislation that doesn't give GM an unfair advantage over other automakers.
The Toyota executive said the 6 kWh minimum requirement the Senate is considering "redefines plug-in electric vehicles to seemingly eliminate consumer tax credits for all but one plug-in vehicle design."
"We believe consumer incentives should encourage all plug-in designs and allow the consumer market to select winners, not legislation," he said.
It's also quite plausible that a planned lithium-ion battery upgrade for the third-generation Prius halfway through its life cycle will not come close to reaching the 6 kWh minimum requirement for the $3,000 plug-in hybrid credit being considered by the Senate committee.
It's hard to think that the company that persevered with its advanced fuel-efficient vehicle would be so unfairly treated while the company that crushed the EV1 would be so unduly rewarded, but that's politics for you.
- Posted by
- Scott Doggett September 18, 2008, 12:47 AM
- Permalink
- Categories:
- Batteries, Chevrolet, Fuel Economy, General Motors, Hybrid, Legislation, Plug-ins and Electric, Toyota
Toyota needs to rename the Prius every couple of years to keep the credit alive. The phase out is based on model (under the current system) not manufacturer. As long as new models are available, so are the credits. Just discontinue the Prius and create a new identical model called the [insert name].
or...
If we're going to use US tax dollars to incent the the purchase of a certain kind of auto, we should use those US tax dollars to incent them for US manufacturers. Toyota has already had it's Prius development paid for by the Japanese government. I don't see why they need more money from the US government.
I agree with brn. And any talk about Toyota being treated unfairly is just silly. Make a Prius (or whatever) with enough capacity to actually function as a true electric vehicle for a distance greater than I can spit, instead of complaining.
What is inconcievable is that anyone would consider EVs especially the "dolt" as a viable solution for energy independence.
Interesting that the vote map shows the great State of Michigan as a NAY. House Bill 6899 is a joke.
"What is inconcievable is that anyone would consider EVs especially the "dolt" as a viable solution for energy independence"
Why not?
You can generate electricity from countless different sources and battery technology is very close to being practical.
They will be common sites of the road within 5 years no matter how stuck in the past some people (and states) are.