Obama's stimulus package expands plug-in hybrid incentives, but diesel fans unhappy

A new-generation of plug-in hybrid vehicles may still be a couple of years away from reaching showrooms but the $700 billion Wall Street bailout bill passed by Congress and signed into law last October by President Bush and expanded by President Obama's recent stimulus package secures a tax break of up to $7,500 for the high-tech cars. But advocates of diesel and other alternative technologies think it's a step in the wrong direction. Instead of giving money to a specific technology, some, like Allen Schaeffer, executive director of the Diesel Technology Forum, think that the government should be setting vehicle performance standards. That would put all technologies on an equal playing field. The industry may just be glad for all the help it can get, however. The financial crises at General Motors and Chrysler at the end of 2008 may have been narrowly averted, but the road ahead in 2009 still looks bleak. It's hoped that the incentives will drum up sales, however, since the modifications made by the Obama administration will open up the $7,500 credit to hundreds of thousands more cars than previously allowed. The Bush law set a cap at 250,000 vehicles total, but the new law allows 200,000 plug-in hybrid credits per manufacturer. It's all part of Obama's goal of getting 1 million plug-in hybrids on the road by 2015. The new tax credits for plug-in vehicles will range from between $2,500 to $7,500, with factors such as battery capacity determining how much owners would receive. Cars like the Chevrolet Volt, due in late 2010, would be eligible for the maximum credit of $7,500. The total cost of the program over the next ten years is estimated at $2.8 billion - a significant sum of money, but a drop in the bucket next to the $700 billion bill it's a part of, or the money received so far by Chrysler and GM. To meet the tax incentive's standards, a plug-in vehicle must have a battery with a minimum capacity of 4kWh, though an additional $200 of tax credit is added for every kilowatt-hour thereafter, which is how the Volt gets to the maximum $7,500 limit with its 16kWh battery.2011 Chevrolet Volt Production model

by Laz #1, Posted: 9/24/2008

I hope Ford does put out the Ford Edge hybrid. My wife and I wanted to buy one but the gas mileage is not great...BTW this is good news for a future purchase of either an EV or hybrid for me!
by voltfan #2, Posted: 12/20/2008

In September 2008, Congress created a $7,500 tax credit for battery-electric plug-in hybrid vehicles. The amount of the tax credit depends on the size of the battery pack (in kilowatt hours of capacity). The Volt, with its planned 16kWh battery, will qualify for the maximum $7,500.

Presumable the new tax law is modeled after the 2006 hybrid tax credit law. I don’t think this is going to work for GM. Unfortunately, if you'll remember, Congress made a tax credit available for hybrid vehicles in 2006, where Toyota Prius qualified for the top tax credit of $3,150. This tax credit turned out to be a kind of government rope-a-dope, where first you buy the car at full value, thinking you’d get the advertised tax credit. Then a year later when you do your income taxes, you learn the credit is subject to an Alternative Minimum Tax (AMT) test, where most all middle and upper-middle income couples with children don't qualify for any of the tax credit -- that's the 'dope' part -- the American taxpayer.

My spouse and I didn't receive a dime in tax credits for the 2006 Prius purchased in February 2006, due to an alternative minimum tax 'test' that applies to the federal income tax credit. At the car dealer, I stood in line and paid top dollar for the car. At the time I purchased the Prius, there was no IRS guidance on the amount of the credits or how the credits would be administered. Purchasers had to act on faith that the federal credits were legitimate as advertised. A Prius purchased in February 2006 qualified for the full $3,150 credit (hooray!), but we got nothing ($0.00)! Got it? Nothing!!!!! Incidentally, my spouse and I don't earn enough to come under the AMT, but the AMT test still disqualified us from the credit completely. We both work and our AGI was $98,000, so go figure. I have read other postings on the Web that claim families of four with AGI (income) of between $80,000 and $750,000 don’t qualify for the hybrid tax credit. I don’t like citing this claim, because I don’t have independent verification from a tax accountant or IRS official, but I have read this in more than one Web posting. As I said, our AGI was less than $100k and we got no tax credit on the Prius, so why would I think our family would qualify for the $7,500 credit on a Chevy Volt in 2010?

On the low end of the income scale, families earning less than $80k should not buy cars costing $40k, Chevy Volts included. At the high end of the income scale, I doubt there will be enough Super Rich Americans willing to buy enough Volts to keep a factory production line running at a volume level necessary for commercial viability. I conclude that the 2008 Tax Law spells doom for Chevy Volt. Amendments anyone?
By stimulus package #3, Posted: 8/13/2009

The stronger US President Barack Obama has promised so many steps for the removal of Recessional effect and already implemented it. In that Stimulus Package was there but the Recession is bigger than the Stimulus Package and therefore, people demand second Stimulus Package. For more details on Obama Stimulus Package refer http://www.prime-targeting.com/recession-is-bigger-than-the-obama-stimulus-package/
By Hybrid Tax Credit #4, Posted: 8/26/2009

There are tax credits currently in place for diesel and other alternative fuel vehicles. You just gotta do the research. However, electric cars are the most promising technology, hence the support for the hybrid purchases. There are also regional incentives in place, such as tax breaks and free parking. Some are just for hybrids, but others are for fuel efficient vehicles - a blanket term for any car that meets the required MPG.