Hybrid Car Review

In an effort to draw some of the new battery development and keep the Chevy Volt development and production in Michigan, the Michigan Legislature passed a tax credit worth up to $335 million from 2011 to 2016 to build high-tech batteries for electric and hybrid vehicles.

GM is expected to decide where to build their battery pack facility in January.

The bill passed at 31-3 in the Senate and 94-0 in the House. They estimate the federal government is going to spend $1 billion in battery development and MI is hoping some of that money will be invested in their state.

I think this is the summary of the bill, and it looks like the refundable tax credit puts the Michigan Economic Growth Authority (MEGA) as the key player. Under the rules, MEGA could enter into agreements for the following:

• The manufacture of plug-in traction battery packs in Michigan, for tax years beginning after 2009 and ending before 2015, subject to various total amounts based on kilowatt hours of battery capacity.
• Qualified expenses for vehicle engineering in Michigan to support battery integration, prototyping, and launch expenses, incurred for tax years beginning after 2008 and ending before 2014; this credit could not exceed $15.0 million per year, MEGA could not authorize more than $90.0 million in total credits under this provision, and the credit could be taken for tax years beginning after 2011.
• Engaging in engineering in Michigan for advanced automotive battery technologies; MEGA could not enter into more than one agreement for this credit, which would be subject to a total limit of $30.0 million and a yearly limit of $10.0 million.
• Capital investment expenses for the construction of an integrative cell manufacturing facility that would include anode and cathode manufacturing and cell assembly, for tax years beginning after 2011; MEGA could enter into up to two agreements for this credit, which would be limited to $100.0 million per agreement; and MEGA would have to appoint a review board to advise it about decisions concerning this credit.