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EV Incentives

Discussion in 'Electric Vehicles' started by vfx, Oct 4, 2008.

  1. vfx

    vfx Well-Known Member

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    The passage of the "bailout" bill has great news for EV buyers!


    from Calcars News

    On the reasonable assumption that the President
    will sign the rescue bill, we will have
    substantial tax credits for plug-in cars. Next
    year, whoever is President can build on this with
    incentives for more than 250,000 cars, inclusion
    of high-quality aftermarket conversions, a
    federal fleet purchase and other measures.

    Here's my quote on what it means, followed by two
    news reports explaining the provisions:

    "The new tax credits for plug-in cars are higher
    than either Presidential candidate has proposed.
    Now automakers and car buyers will no longer see
    higher up-front costs as a showstopper. In the
    centennial year of GM's founding and Ford's Model
    T, the auto industry can now enter a century of
    plug-in cars. And with this legislation, we'll
    also get more wind and solar energy that will
    make plug-in cars drive cleaner every year
    they're on the road." -- Felix Kramer, Founder,
    The California Cars Initiative (CalCars.org)
    GREEN CAR CONGRESS: "Senate Version of Bailout
    Bill has PHEV Credits" 2 October 2008
    Green Car Congress: Senate Version of Bailout Bill has PHEV Credits

    The revised bailout legislation passed by the US
    Senate on Wednesday (H.R. 1424) -- which has
    ballooned from an original 3-page plan from
    Treasury Secretary Paulson to the 451-paqe bill
    approved by the Senate -- contains among its many
    other new provisions a tax-credit for plug-in hybrid electric vehicles.

    The credit is a base $2,500 plus $417 for each
    kWh of battery pack capacity in excess of 4 kWh,
    to a maximum of $7,500 for light-duty vehicles;
    $10,000 for vehicles with gross vehicle weights
    of more than 10,000 but less than 14,000 pounds;
    $12,500 for vehicles with a GVW of more than
    14,000 but less than 26,000 pounds; and $15,000
    for any vehicle with a GVW of more than 26,000 pounds.

    Phaseout of the credit is to begin after the
    total number of qualified PHEVs in the US sold
    after 31 December 2008 is at least 250,000.

    Qualifying vehicles must have a battery pack with
    at least 4 kWh of capacity—a provision that will
    preclude the inclusion of the first generation of
    Toyota PHEVs as well, potentially, as other lower all-electric range
    plug-ins.

    EDMUNDS GREEN CAR ADVISOR "Plug-In Tax Credits
    Hitching Ride On Wall Street Bail-Out Bill"
    October 3 by John O'Dell
    "Plug-In Tax Credits Hitching Ride On Wall Street Bail-Out Bill" Green Car Advisor

    (with a CalCars photo)

    As the House of Representatives takes up the
    $700-billion financial system rescue bill today,
    it automatically will be considering a
    multi-billion-dollar package of tax breaks for
    alternative energy programs and plug-in hybrid
    purchases. The plug-in and alt-energy credits
    were tacked onto the bail-out bill in the Senate
    Monday to short-circuit an impasse that had
    developed in negotiations with the House and was
    threatening to kill the measures.

    The plug-in hybrid tax credit provision would
    provide $1 billion in tax credits for purchasers
    of plug-in hybrids, the amounts varying with the
    amount of all-electric travel a particular model
    could provide. A car with an extended-range
    electric drive system such as the upcoming
    Chevrolet Volt, due for production at the end of
    2010, would qualify for a $7,500 credit - the
    maximum for vehicles under 10,000 pounds. The
    credits are based on battery capacity rather than
    electric range, but range increases with capacity.

    The Volt, with a 16-kilowatt-hour battery, will
    be capable of traveling 40 miles on its initial
    charge, according to General Motors. Plug-in
    vehicles with at least a 4-kwh battery pack would
    qualify for a $4,168 tax credit. Chrysler and
    Nissan Motor Co. both have announced plans to
    build electric vehicles with Volt-like systems by
    or after 2010, while Toyota is developing a
    plug-in with a shorter all-electric range that it
    will begin leasing to fleet customers at the end of 2010.

    The incentives would phase out as sales of
    plug-in mount, disappearing after automakers
    collectively sell more than 250,000 plug-in
    vehicles in a calendar year. The tax credit
    portion of the bail-out bill also has larger tax
    breaks for plug-in versions of medium and
    heavy-duty trucks. It also extends existing tax
    credits for cellulosic ethanol and biodiesel
    development, and for wind, solar and hydro-electric power.

    -- -- -- -- -- -- -- -- -- -- -- --
    Felix Kramer [email protected]
    Founder California Cars Initiative
    California Cars Initiative for Plug-In Hybrids
    CalCars-News Archive
    -- -- -- -- -- -- -- -- -- -- -- --
     
  2. graham

    graham Active Member

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    How do these tax credits work for a buyer? Do they offset income tax, or are they taken off the price of the car at the time of purchase? Something different?
     
  3. TEG

    TEG TMC Moderator

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    Those articles talk about PHEVs but what about BEVs? Will Tesla's vehicles qualify for the credit too?
     
  4. graham

    graham Active Member

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    According to This Article - Detroit News the tax credit is for both PHEV and BEV (emphasis mine):

     
  5. GSP

    GSP Member

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    Tax credits offset income tax. This makes it as good as cash except you don't get it at time of purchase. You have to wait until you file your tax return (Jan1 -April 15 window). Also, if you are subject to the AMT (alternative minimum tax) you will loose some or all of your tax credits. The AMT starts to apply at about $250k/yr income.

    Tesla buyers likely make enough that the AMT will eliminate all of the plug-in tax credit. Chevy Volt buyers may get some or all of the credit.

    GSP
     
  6. TEG

    TEG TMC Moderator

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    Yeah, AMT can catch some people by surprise.
    Lots of hybrid buyers making less than $250K missed out on their credit because of AMT. In states with high state income tax (like California), AMT can hit you at well under $250K. It depends on a lot of factors.

    Hybrid Tax Credits & Alternative Minimum Tax (AMT) | Hybrid Cars
    "

    • The larger your family, the harder it is to escape the AMT.
    • Homeowners with incomes between $150,000 and $400,000 are very likely to be subject to AMT.
    • Residents of California, New York, and any other state that charges state income tax are more likely to fall into the AMT bucket."
    Hybrid Car Credits and AMT - Tax Tips from TurboTax
    Annual Newsletter 2007: Beware the AMT trap for the hybrid vehicle tax credit
     
  7. DDB

    DDB Member

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    I've heard that there were massive disclaimers when the Prius tax credits were being pushed. You can expect the same and no recourse should YOU miscalculate the applicability of the tax. Still, $7500 off any EV is a big deal, especially the Volt. GM will be able, assuming there isn't dealer gouging to offer it around $$35,000.
     
  8. graham

    graham Active Member

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    It was mentioned on the Owner's Board that the original Bailout plan (the one which fell through) specifically planned for the $7500 to act as a tax credit regardless of qualifying for the AMT. But it is unclear that this new Bailout plan does so.
     
  9. DDB

    DDB Member

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    I suppose a rationale would be that the "masses" would fall smack in the middle of the families that are affected by the AMT. Good catch.
     
  10. graham

    graham Active Member

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    Congress Throws Cash At Plug-In Hybrids | Hybrid Cars
    Still unclear as to if the plug-in tax break has anything to do with the AMT at this point - but I am hopeful.
     
  11. vfx

    vfx Well-Known Member

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  12. graham

    graham Active Member

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    Assuming you can purchase it before March 31. I think the Federal Tax thing doesn't start until Jan 1. So the lucky people will be Californians who can purchase their car between Jan 1 and Mar 31. Originally, I thought I was going to fall in that category, but now I am afraid my car will arrive too late.

    And of course, that is under the assumption that the purchase date is when the car arrives and you pay sales tax, not when you actually spent money on it. I am apparently spending 2007, 2008 and 2009 buying this car...:rolleyes:
     
  13. SteveF

    SteveF Member

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    Ditto for me. But there is a ray of hope for those of us who take delivery after March 31st. I spoke with a person at CARB today, who said that there is another bill under consideration, AB 118, which (if passed) would provide new credits for EV purchasers around the Spring of '09. Keep your fingers crossed...

    AB 118 ? Energy Efficiency, Lower Carbon Fuels, and a Critical Investment in California?s Economic and Transportation Future - California Progress Report
     
  14. Stewart W

    Stewart W Member

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    **************
    I believe the car in service date would be the governing date..(titled and registered). All other monies are considered part of a deposit...IMHO
     
  15. graham

    graham Active Member

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    Yes, that is my assumption as well. Unfortunately for me, that date is liable to be May 2009 which will be too late for the March 31, 2009 deadline.
     
  16. SteveF

    SteveF Member

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    #16 SteveF, Oct 7, 2008
    Last edited: Oct 7, 2008
    I can confirm this as well, following my converstion with CARB yesterday. In fact, for this particular credit we are discussing, aside from the one-page application form, there are four things needed when you submit for the credit:

    1) a copy of the purchase agreement
    2) a copy of the vehicle registration (temporary registration acceptable)
    3) a copy of a current utility bill statement
    4) evidence of sealed maintenance-free batteries and a 24 month warranty (which I assume TM can provide to owners)

    So the key trigger is that you have to have taken delivery of the car, as evidenced by the registration paperwork. On the hope that you might still be able to qualify if your car came in a few days after 3/31, I asked if you could send the application in without the registration (to be followed a few days later with the registration paperwork when it was in hand). No go, they said they won't process the application, as it will be considered to be incomplete without all 4 items listed above. :frown:
     
  17. graham

    graham Active Member

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    Ouch! Then I guess we need to hope AB 118 passes, is at least as good as the current credit and can start by April 1...
     
  18. SteveF

    SteveF Member

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    Yes, although the person I spoke to at CARB said if AB118 passes, there may well be a retroactive component that could coincide with the expiration of the March 31st credit, even though AB118 bill is separate from CARB. If we're lucky...
     
  19. vfx

    vfx Well-Known Member

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    Is there not any way that Telsa can help with the paperwork to file without actually giving you the car?
     
  20. SteveF

    SteveF Member

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    That would be nice, wouldn't it. But I don't see how TM could provide registration documentation without having an actual, physical car to register. But perhaps if your car is at least in Menlo Park, you could "take delivery" of it while the final work is being done, if both you and TM are willing?

    This might gain you a couple of weeks, if the timing was right and your car arrived in Menlo Park by at least 3/31. My guess is that it would be difficult if not impossible to get registration paperwork earlier than that. But the $5K credit would make it worth the effort to investigate these possibilities, if you were that close to making the deadline.
     

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