Feb 14, 2009 (From the CalCars-News archive)
We can spend our weekend considering the impact of a multi-fold increase in the tax credit for new plug-in vehicles should the stimulus compromise pass both houses. Taken in combination with other external factors, this could be the beginning of the breakthrough we've been hoping for. Carmakers can take the opportunity to declare it's the end of business as usual for them, and seize the opportunity to begin a far more rapid transition to the electrification of transportation. Instead of a slow rollout with a few tens of thousands of vehicles for several years, they can race to get to high volume.
Jay Friedland, Plug In America's Legislative Director, reports on the results of the House/Senate Conference on the Stimulus Bill:
"A small change is going to have a major positive impact. They switched the limit on plug-in electric vehicle tax credits from an industry cap of 250,000 to a per manufacturer cap of 200,000 each. Right now at least six major manufacturers have announced EVs or PHEVs so this could provide a consumer tax incentive for more than one million vehicles."
Right now, we've been looking at a target from President Obama of one million plug-ins by 2015. If the automakers find ways to survive and begin an aggressive transition, these credits could incentivize all of those and more. And in the coming years, because the benefits to society of of fueling vehicles with cheaper, cleaner, domestic electricity don't go away, we can work to extend and expand the incentives beyond these numbers, and to increase the level of credits given to conversions of internal combustion vehicles that produce equivalent levels of petroleum displacement.
Here's the summary (by the way, if you're puzzled about the mathematical formula, the base + per kWh number applied to the Chevy Volt results in exactly the $7,500 maximum credit):
The American Recovery and Reinvestment Act of 2009 – February 12, 2009
Full Summary of Provisions from Senate Finance, House Ways & Means Committees
Plug-in Electric Drive Vehicle Credit. The bill modifies and increases a tax credit passed into law at the end of last Congress for each qualified plug-in electric drive vehicle placed in service during the taxable year. The base amount of the credit is $2,500. If the qualified vehicle draws propulsion from a battery with at least 5 kilowatt hours of capacity, the credit is increased by $417, plus another $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours up to 16 kilowatt hours. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter in which the manufacturer records its 200,000th sale of a plug-in electric drive vehicle. The credit is reduced in following calendar quarters. The credit is allowed against the alternative minimum tax (AMT). The bill also restores and updates the electric vehicle credit for plug-in electric vehicles that would not otherwise qualify for the larger plug-in electric drive vehicle credit and provides a tax credit for plug-in electric drive conversion kits. This proposal is estimated to cost $2.002 billion over 10 years.
Several ways to see the full language:
http://thomas.loc.gov/home/h1/Recovery_Bill_Div_B.pdf You'll find it at pages 50-68 of the PDF.
See the full Conference Report on the House Rules website at http://www.rules.house.gov/
In the full bill (download from the second link below and search for Sec. 1141): http://thomas.loc.gov/home/approp/app09.html#h1http://thomas.loc.gov/home/approp/app09.html#h1