The Senate Finance Committee is currently proposing changes to the plug-in electric drive motor vehicle credit by increasing the 250,000 vehicle limitation to 500,000. The bad news for LSV manufacturers and purchasers is that the changes also exclude low speed vehicles from qualifying for the credit. Instead they are creating a separate tax credit for LSVs, motorcycles and three-wheel vehicles of 10% up to $4,000. The credit will be good for vehicles sold before 2012.

Given the price ranges of current LSVs and three wheel vehicles, the changes mean a significant reduction in the tax credit for these vehicles. The original tax credit started at $2,500 and increased for vehicles with battery packs over 4KW in power. As I interpret it, a $10,000 to $15,000 LSV will now only receive a tax credit of $1,000 – $1,500, a sixty to forty percent reduction in the tax credit that would be available under the current law.

On a related note, according to people I spoke with at the Electric Drive Transportation Association, the IRS has still not ruled on the eligibility of various vehicles under the current tax credit rules .

Original story greencarcongress.com