By on October 13, 2010


The Federal tax credit for purchasing an electric vehicle is good for up to $7,500 off your next tax bill, under current provisions. But it won’t last forever: each manufacturer can sell 200,000 EVs and plug-ins with the federal rebate, but after that, consumers must pay full price (less any state incentives). And though GM will produce only 10k Volts in 2011, and only 45k units in 2012, its Vice Chairman Tom Stephens is already agitating for the 200k unit limit to be lifted. Optimistic much?

Stephens argument to the Detroit News: subsidies for the first 200k units will only nurse electric vehicles forward through the first generation of products. The implication, of course, is that EVs and plug-ins are not going to be economically viable even by the second generation of products, and will need ongoing support. So much for the promise that EV and plug-in subsidies were a “bridge” to a viable next-generation of eco-mobiles. Meanwhile, by the time GM, Nissan, Ford, and every other EV-hawking OEM hits the magic 200k volume mark, American taxpayers will have spent around $1.5b per manufacturer on these subsidies. With, apparently, little to nothing to show for it in terms of making the second generation of plug-ins more palatable to consumers.

But the push to pile on EV subsidies doesn’t end with a proposed lifting of per-manufacturer caps. Rep Debbie Stabenow (D-MI) tells the DetN that

she wants to “front-load” the $7,500 tax credit for purchasers of electric vehicles — so like “Cash for Clunkers” consumers could get the money deducted from the price of a new vehicle at the dealership.

Currently, owners must file for the rebate when they file their tax returns. Some wealthy owners of electric vehicles won’t qualify for the rebate, advocates say, because of the alternative minimum tax.

Because someone has to think of the wealthy. After all, even with existing tax credits, they’re the only demographic capable of blithely spending upwards of $30k for a car that makes an eco-friendly statement far better than it recoups its price premium in fuel savings. Stabenow also supports jacking up the tax credit to $10k per vehicle, as part of the Roadmap to Electrification, an incentives and infrastructure bill that could cost taxpayers about $124b.

Sooner or later, however, EVs will have to stand on their own and compete against other drivetrains on a level playing field. Loading up more incentives now, and guaranteeing them further into the future won’t stimulate innovation, it will stifle competition. Besides, no manufacturer is even close to selling 200k plug-ins, so calls for a tax credit extension are hugely premature. Let’s let the current generation roll out with the current incentive, and let the market work for a few years before making government policy. Once we know how the market respond to EVs under the current circumstances, the government will better understand their value and can formulate more sensible, effective regulation from there.

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16 Comments on “Anticipating 200k Volt Sales, GM Pushes Against EV Tax Credit Cap...”


  • avatar
    gslippy

    Michigan representatives won’t be so enthusiastic about EV subsidies if it turns out that the majority of EVs are ‘foreign’ nameplates.  And is she willing to reinstate the Prius subsidy?
     
    The problem is that an EV will never be on-par with an ICE car for price/performance.  Those who tout the general advances in technology and subsequent economies of scale fail to realize that battery storage technology has not improved that much over the last decade, and that it has nowhere near the energy density as gasoline.
     
    Another basic problem with EVs is that they do not mesh well with the American cultural mandate of independence.  The notion of a car being tied to a plug every night just won’t sit well with most consumers, not to mention short range and no infrastructure for ‘instant’ fillups.
     
    Another shortcoming of the subsidy is that it will never be enough to offset the anticipated terrible trade-in value of an EV with used batteries.  That’s a cost of ownership most calculations ignore.

  • avatar
    Daanii2

    Once you get to suck on the government’s teat, no one can get it out of your mouth. Something addicting about it.

  • avatar

    and just who is going to know when the magical last qualifying unit is delivered? this is so wrong in so many ways.

  • avatar
    GarbageMotorsCo.

    Surely GM can find 200 thousand suckers who will pay the $41 thousand dollar entry fee for the chance to one one of their wundercars. Give em about 20 years to do it tho.

    Question is, will the company last the next 20 years to see this through? I’m way more skeptical about that than I am about an unproven, zero rep, overpriced econobox making headway in the market. There are 300 million people in this Country, plenty of suckers to sell them to.

    • 0 avatar
      mike978

      You need to calm down. Your tag name says it all. GM will still be around and the Volt is not an econobox. It is not super compact, doesn`t have a very cheap interior and it has an advanced drive-train. Not much says econobox.

      We gave subsidies for the Prius which was desiogned, developed and built abroad as opposed to the Volt. Why not support an American company or does your level of patriotism only extend to giving the rich tax breaks and invading other countries!

    • 0 avatar
      aspade

      Two financial wrongs don’t make a right.  They make you bankrupt faster.
       
      There’s nothing patriotic about yet another deficit funded kick in the teeth for the American taxpayer.

  • avatar
    Some Guy

    Rather than giving out money to electric car buyers, the government can increase gas prices instead.

  • avatar
    Blobinski

    “You need to calm down. Your tag name says it all. GM will still be around and the Volt is not an econobox. It is not super compact, doesn`t have a very cheap interior and it has an advanced drive-train. Not much says econobox.” – Mike978

    Sure – the same thing can be said for the Prius and it is MUCH cheaper and gets the same real-world mileage….someone tell me why I would by a Volt please?  So I could watch the door panels fall off the car, window motors fail, lights short out, and drop major coin on 3 transmissions in 100K miles?  No thank you.

    Again – elitist, aloof folks telling hard working taxpayers to just calm down and everything will be alright and to not get excited…..GM is using our money to built yet another car that will likely be an expensive science project – and we should all calm down and just forget about it….sounds like a theme these days.

    • 0 avatar
      psarhjinian

      elitist, aloof folks telling hard working taxpayers to just calm down and everything will be alright and to not get excited

      This always bothered me.  Not elitist and aloof folks telling hard-working taxpayers what to do, but hard-working taxpayers being sold on a message of rampant anti-intellectualism and substituting populist jargon for analysis.

      Powermongers have a long and tragic history of using populism and anti-intellectualism for nefarious purposes.  Give me aloof and elitist any day of the week.

    • 0 avatar
      mike978

      Umm if your commute is less than 40 miles (like 75% of hard working tax paying Americans) then your fuel economy will be significantly better than the Prius because you will use no gas. Pretty simple.

      So you think GM just build expensive science projects. Does the Cruze, Malibu, Camaro, Regal, SRX, Equinox or many other vehicles strike you as very expensive science projects. Or could they just be class competitive (or leading) products which will help GM pay back the taxpayer.

      I don`t hear you complaining about Boeing and other defence contractors getting huge sums of money for products that are late, over budget or just not plain needed.

    • 0 avatar
      Quentin

      mike – “Umm if your commute is less than 40 miles (like 75% of hard working tax paying Americans) then your fuel economy will be significantly better than the Prius because you will use no gas. Pretty simple.”

      My commute is 6 miles each way.  This means I commute around 4000 miles/year.  Even in my 23 mpg 4Runner, I only spend $400/year commuting.  I do around 17000 miles/year total.  Most of that mileage is driving to see my family on weekends.  Taking my normal quantity and length of trips with my commuting, the Volt would get an average of 62mpg.  Even after tax incentive and picking a nicely equipped $27,000 Prius, the initial cost difference of the Prius and Volt would take 51 years(!!!) to make up in fuel savings.  Why should I care about the efficiency of my commute when it only makes up 25% of my driving?  Who cares about efficiency of a certain part of your driving when it requires such a massive up front cost for marginal improvement in efficiency?

      In order to determine if the Volt makes sense to YOU, you need to sit down and pareto where you spend your transportation money. If the only place you drive is to and from work, god help you, and it is 40 miles away, with free charging at work, the Volt might make financial sense when you include federal subsidies.  I’d say for 90% of people, though, the Prius is going to use marginally more fuel but cost less, overall, out of pocket.

  • avatar
    zbnutcase

    200K? On this POS? Lucky if they sell 20K ever…

  • avatar

    Require the IC in the Volt to run on 15% ethanol the 2nd year, then 5% higher each year. This puts all the shit in a sack so we can admire it.

  • avatar
    FleetofWheel

    There’s so many conflicting and self-canceling effects from these nested levels of income tax gimmicks.
    Reminds me of an old TV as run by organized labor criticzing big busines trying to make money by moving money around.
    Now govt gets all excited by a cool new tax lever to goose consumer behavior but then the envy-class gets peeved because the rich can’t be excluded from participating.
     

  • avatar
    Steven02

    I don’t agree with making a 200k limit on the cars.  That would be ridiculous.  But excluding certain tax brackets is also a dumb thing to do.  We aren’t talking about the super rich, they aren’t likely to buy this car anyway.  But tax credits to people who buy Prius and other vehicles with gov’t subsidies loose them when they make too much money.  AMT effects many more people today.  People who consider themselves middle class.  Painting a broad stroke here calling them rich is ridiculous.

  • avatar
    nonce


    <i>The implication, of course, is that EVs and plug-ins are not going to be economically viable even by the second generation of products, and will need ongoing support.</i>
     
    No, the implication is that he wants more money.
     
     
    Now, although I’m a fan of electric cars, I think that 200,000 cars * $7500 each is already generous. I’d rather have a more economically efficient way of providing support, like a bigger gas tax.


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