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$1Billion Plug-In Incentives Will Speed Auto Industry's Transformation
Oct 3, 2008 (From the CalCars-News archive)
This posting originally appeared at CalCars-News, our newsletter of breaking CalCars and plug-in hybrid news. View the original posting here.
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On the reasonable assumption that the President will sign the rescue bill, we will have substantial tax credits for plug-in cars. Next year, whoever is President can build on this with incentives for more than 250,000 cars, inclusion of high-quality aftermarket conversions, a federal fleet purchase and other measures.

Here's my quote on what it means, followed by two news reports explaining the provisions:

"The new tax credits for plug-in cars are higher than either Presidential candidate has proposed. Now automakers and car buyers will no longer see higher up-front costs as a showstopper. In the centennial year of GM's founding and Ford's Model T, the auto industry can now enter a century of plug-in cars. And with this legislation, we'll also get more wind and solar energy that will make plug-in cars drive cleaner every year they're on the road." -- Felix Kramer, Founder, The California Cars Initiative (

"Senate Version of Bailout Bill has PHEV Credits"
2 October 2008­2008/­10/­senate-version.html

The revised bailout legislation passed by the US Senate on Wednesday (H.R. 1424) -- which has ballooned from an original 3-page plan from Treasury Secretary Paulson to the 451-paqe bill approved by the Senate -- contains among its many other new provisions a tax-credit for plug-in hybrid electric vehicles.

The credit is a base $2,500 plus $417 for each kWh of battery pack capacity in excess of 4 kWh, to a maximum of $7,500 for light-duty vehicles; $10,000 for vehicles with gross vehicle weights of more than 10,000 but less than 14,000 pounds; $12,500 for vehicles with a GVW of more than 14,000 but less than 26,000 pounds; and $15,000 for any vehicle with a GVW of more than 26,000 pounds.

Phaseout of the credit is to begin after the total number of qualified PHEVs in the US sold after 31 December 2008 is at least 250,000.

Qualifying vehicles must have a battery pack with at least 4 kWh of capacity—a provision that will preclude the inclusion of the first generation of Toyota PHEVs as well, potentially, as other lower all-electric range plug-ins.

"Plug-In Tax Credits Hitching Ride On Wall Street Bail-Out Bill"
October 3 by John O'Dell­greencaradvisor/­2008/­10/­
(with a CalCars photo)

As the House of Representatives takes up the $700-billion financial system rescue bill today, it automatically will be considering a multi-billion-dollar package of tax breaks for alternative energy programs and plug-in hybrid purchases. The plug-in and alt-energy credits were tacked onto the bail-out bill in the Senate Monday to short-circuit an impasse that had developed in negotiations with the House and was threatening to kill the measures.

The plug-in hybrid tax credit provision would provide $1 billion in tax credits for purchasers of plug-in hybrids, the amounts varying with the amount of all-electric travel a particular model could provide. A car with an extended-range electric drive system such as the upcoming Chevrolet Volt, due for production at the end of 2010, would qualify for a $7,500 credit - the maximum for vehicles under 10,000 pounds. The credits are based on battery capacity rather than electric range, but range increases with capacity.

The Volt, with a 16-kilowatt-hour battery, will be capable of traveling 40 miles on its initial charge, according to General Motors. Plug-in vehicles with at least a 4-kwh battery pack would qualify for a $4,168 tax credit. Chrysler and Nissan Motor Co. both have announced plans to build electric vehicles with Volt-like systems by or after 2010, while Toyota is developing a plug-in with a shorter all-electric range that it will begin leasing to fleet customers at the end of 2010.

The incentives would phase out as sales of plug-in mount, disappearing after automakers collectively sell more than 250,000 plug-in vehicles in a calendar year. The tax credit portion of the bail-out bill also has larger tax breaks for plug-in versions of medium and heavy-duty trucks. It also extends existing tax credits for cellulosic ethanol and biodiesel development, and for wind, solar and hydro-electric power.

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