Hybrid Car Review

The stimulus bill (also known as the American Recovery and Reinvestment Act of 2009) provides some incentives for plug-in hybrids and extended-range electric vehicles (E-REV), which is good news for those interested in the plug-in Prius or Chevy Volt due out next year or in converting their hybrid into a plug-in today.  The final bill provides for federal tax credits set up similarly to those for hybrid cars.

The tax credit for plug-in hybrids ranges based on the size of the battery pack and the size of the vehicle.  People who buy the Chevy Volt are expected to get $7,500 in tax credits, if they qualify.  But the amount of the credit could move upwards to $15,000 for plug-in trucks.

The number of vehicles eligible for the tax credit was moved from 250,000 to 500,000, and is not based on what company makes the vehicle.  That provision makes it unlike the hybrid car tax credit, which phased out for each automaker after they sold their first 60,000.  The provision was made to alleviate the concern domestic car makers had since Toyota and Honda had a big lead on building hybrid cars when the law was passed.

Other Provisions for Battery, Electric and Hybrid Technology

• Conversions will get up to $4,000 in tax credits, if the buyer qualifies for the tax credit, at 10% of the conversion price.
• Neighborhood electric vehicles (golf carts?) are also eligible for a tax credit.
• The bill also provides for $2 billion in direct grants for battery development and manufacturing. 
• New car buyers could see a tax deduction from auto loans and local sales taxes.
• The federal government will also have money to lease alternative fuel vehicles, like hybrids, plug-in hybrids and flex-fuel vehicles.

Defense Spending on Alternative Fuel Vehicles
According to the Democratic Policy Committee report, $200 million is being set aside for Operation and Maintenance funds for the Army, Navy, Air Force, and Marine Corps for the lease of alternative energy vehicles; $100 million to DOD for the procurement of lithium ion batteries, robotics, fuel cells, and other alternative vehicle technologies; and $200 million in Defense-wide Research, Development, Test and Evaluation (RDT&E) for the Manufacturing Technology Program, for rapid technology transitions and energy efficient technologies for use by operational forces and military installations;

Obama's Reaction
"The auto industry, RV industry, transportation industry is so important to us here in the Midwest," Obama said. "If we don’t use this crisis as an opportunity to start retooling, then we will never catch up and be able to compete effectively against Japanese automakers, Korean automakers.

"We will find ourselves continuing to slide. This should be an opportunity for us to retool."