Congress Tunes-in To Plug-Ins
By Michelle Krebs September 24, 2008By Bill Visnic
The U.S. Senate on Tuesday passed an expansive tax bill that had many automakers on full alert because it included provision of a tax credit for hybrid or fully electric vehicles with batteries that can be recharged from the electric grid - so-called "plug-in" vehicles.
If passed by the House, which is expected, the bill provides for as much as a $7,500 tax credit for purchasers of a plug-in vehicle. The credit, starting at $2,500, would increase in proportion to the vehicle's installed battery capacity up to the $7,500 maximum.
No plug-in vehicles are yet in production, but the technology has come to the industry forefront thanks largely to the General Motors Corp. exhaustive marketing - not to mention intense public interest - for its innovative Chevrolet Volt extended-range electric vehicle, slated for introduction in 2010. GM's chief competitor in the race to bring more electrification to vehicle propulsion systems is Toyota Motor Corp., which plans a plug-in version of Prius hybrid.
And Tuesday, Chrysler LLC threw its hat in the ring, promising to launch a range of plug-in hybrid and fully electric vehicles starting in 2010.
Because of its proposed ability to travel up to 40 miles solely on battery power, it's likely buyers of the Volt would be entitled to the maximum tax credit. Through the tax credit, an effective price reduction of $7,500 would help GM to perhaps gain a wider audience for the 4-seat Volt, whose extensive use of high-tech, expensive components means it could cost upwards of $40,000, GM has suggested.
The scope of the bill, which encompasses enormous tax-reduction initiatives meant to spur a variety of alternative-energy initiatives such as wind and solar power for both industry and individuals, led members of Congress to argue for months over numerous facets of the legislation, not the least of which was adjusting provisions of the long-controversial alternative minimum tax.
The solar- and wind-energy industries also intensely lobbied for passage of the bill, which was passed by a landslide 93-2 in the Senate. The House of Representatives is expected to vote on the bill by the end of the week, prior to Congress' scheduled recess.
Photo by GM
Chevrolet Volt, unveiled last week, may qualify for a tax credit..
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What's to prevent the mfgs from upping the MSPR just to increase their margins because they know that the net price to the customer will be acceptable. Or is it their contention that there is no way to put a hybrid or pure e-vehicle on the street and still make a profit? Prius anyone? Taxpayers should not be put into the position of having to subsidize another's auto purchase. More socialism than I can handle today, thank you.
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