As part of the recently passed H.R. 1424, the Emergency Economic Stabilization Act, consumers of plug-in electric vehicles can qualify for a tax credit of $2,500 to $7,500. I have recently spoken with a number of NEV manufacturers to get their thoughts on the legislation and as a group they are cautiously optimistic about the tax credit applying to NEVs. According to Kara Saltness of Miles Electric Vehicles the tax credit originally targeted highway speed vehicles but it appears that NEVs will qualify and that sentiment is supported by a press release from U.S. Representative Earl Pomeroy of North Dakota, home of GEM vehicles.
“Congress has taken an important step in encouraging the use of energy efficient vehicles by creating a $2,500 tax credit for plug-in electric drive vehicles like those manufactured by Global Electric Motorcars,”
According to the NEV manufacturers I spoke with the details are still currently being worked out by the government such as, who will qualify, consumers or businesses, likely both is the sentiment, and whether golf carts will be specifically excluded.
Qualifying electric vehicles must be a plug-in and be powered by a battery pack with a minimum of 4 KW of capacity. The credit would increase by $417 from $2,500 for each KW above 4KW. Most of GEMs models have a 4KW battery pack and others have 6 KW. Similarly Dynasty and Miles Automotive believe their vehicles will qualify for the tax credit as well. This could create a significant boost to the NEV market since the $2,500 tax credit translates into a sizable cost deduction for these vehicles. For example, based on prices listed on GEM’s website the tax credit would mean a discount of anywhere from 20% to 37% off the price of a GEM, depending on the model. Dynasty is currently planning on introducing a lithium ion battery pack for their vehicle in the middle of next year and this tax credit would essentially cover the extra cost of that battery, according to general manager Danny Epp.
According to the US Senate’s summary of the bill, the tax credit is slated to start in 2009 and
“…taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the total number of qualified plug-in electric drive vehicles sold in the U.S. exceeds 250,000.”
This means that NEV manufacturers will be competing against manufacturers of full-size and highway speed vehicle manufacturers for a sizable but limited number of credits. However, for 2009 and even 2010 there may not be much competition for the NEVs since not many full-size plug-in electric vehicles are expected to be available.
I am confused about who is responsible for interpreting this legislation. I read the document and I interpreted “vehicles” as any vehicle that required registration with any State of the union. If any community allows golf carts without requiring them to be registered as LSV’s, then those would not qualify. Kind of like a dirt bike in a community that does not enforce motorcycle rules on their streets.
There is some discussion regarding whether 3 wheeled vehicles will qualify. I cannot understand why not. In 2009, the only fully electric electric vehicles that are not restricted by the LSV classification are 3 wheeled vehicles that are classified as motorcycles.
If this legislation was targeted at the new PHEV’s like the Chevy Volt, it was was not written very well.