By on February 7, 2011

Senator Debbie Stabenow has introduced S. 3715, known as the Charging America Forward Act, which would extend tax credits for plug-in vehicles until 2014 and “front load” the credits, to create a dealership-level discount, among other provisions. Though inspired by President Obama’s call to put a million plug-in vehicles on the road by 2015, Stabenow’s website plays up a single, all-important angle to the bill

Michigan is already a leader in emerging hi-tech battery and electric car production. Other countries are acting to develop their own advanced vehicle markets because they realize the tremendous economic potential this new technology represents.  These initiatives will allow Michigan innovators to continue to out-compete the world and create new jobs here

Though the full text of the bill hasn’t hit Govtrack yet, the DetN reports that it’s chock full of plug-in subsidies, so it seems that Stabenow’s proposa is considerably more dramatic than the recent plug-in credit extension introduced by Rep Sander Levin. And that’s not necessarily a good thing…

For starters, we assumed that efforts to front-load plug-in tax credits were dead in the water before Stabenow resurrected them. After all, the only real beneficiaries of front-loaded EV credits (other than qualifying automakers) are wealthy EV buyers whose tax credit might be eaten up by the Alternative Minimum Tax. We assumed that tax breaks for the wealthy might not fly within the Democratic Party, but then, any form of EV stimulus amounts to a tax break for the wealthy as nobody is buying EVs as a purely financial choice.

Additionally, the DetN reports that Stabenow’s bill would

authorize the U.S. Energy Department to award another $2 billion in grants “for the manufacturing of advanced batteries and components, and provide facility funding awards” for vehicle batteries, hybrid electrical systems and components…

It would also extend and expand a tax credit for purchasing medium or heavy-duty plug-in hybrid trucks until 2014. The tax credit would be worth between $15,000 and $100,000, depending on the truck’s size.

The grants would be another round of DOE giveaways to plug-in efforts like DC Bus Capacitor manufacturing by KEMET, and the still-mysterious “Construction of U.S. manufacturing capabilities to produce the second-generation GM global rear-wheel electric drive system.” Not to be confused with retooling loans, these grants help some of the less-sexy suppliers, although they keep the fledgling EV industry at the whims of the DOE, which can drastically affect the fortunes of individual companies by making these grants. As for the truck credit, it sounds a lot like a greenwashed version of the old Bush-era SUV tax credits that Detroit loved and environmentalists loved to hate.The bill will also reportedly include increased tax breaks for home charging systems as well as home energy storage systems.

We will report back when a full text of the bill surfaces, but at this point, it seems that Stabenow’s bill is better pork than policy. That perception is only amplified by the fact that a number of Michigan-area companies have signed on, including

  • General Motors
  • Johnson Controls
  • Edison Electric Institute
  • Calstart
  • Eaton Corp
  • MEMA (Motor and Equipment Manufacturers Association)
  • Battery Electric Vehicle Coalition
  • Electric Drive Transportation Association (EDTA)
  • Hybrid Truck User Forum (HTUF)
  • Azure Dynamics
  • A123 Systems
  • Arvin Meritor
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29 Comments on “Stabenow Introduces Plug-In Tax Credit Extension...”


  • avatar
    Dimwit

    Where is this money coming from?

    • 0 avatar
      windswords

      China. And whoever else is willing to lend to us. It’s certainly not the from the taxpayers. That money was eaten up in the budget a long time ago.
       
      “…but then, any form of EV stimulus amounts to a tax break for the wealthy as nobody is buying EVs as a purely financial choice.”
       
      And therin lies the rub. It’s not economically viable. But somehow, if we just throw enough money at it, it will make financial sense and everyone and there grandmother will pony up for an EV.

  • avatar
    derm81

    Well she is from Michigan so I expect her to push something like this for my former home State. Kinda like Rockefeller and coal or Ahnold and Hollywood.

  • avatar
    jkross22

    Stabenow has every right and responsibility to lobby for this tax credit, as she comes from the state that will gain most if not all of the upside.
     
    The rest of us have every right and responsibility to tell her she’s full of shit, and that this type of subsidy, whether direct or indirect, is not affordable at a time when our country is 1.3trillion in the hole.

    • 0 avatar
      forraymond

      2-10 year UNFUNDED WARS – I’d say a 1.3T is a drop in the bucket compared to our ‘War on Terror’ (a ‘war’ which has made us much more vulnerable and much less safe)
       
      PRIORITIES AMERICA, PRIORITIES

    • 0 avatar
      shaker

      If we don’t INVEST (yes, invest) now in changing our country from an oil grubbing military machine, blind to the fact that the world will kick our collective asses economically, all the military power in the world won’t help us compete in the coming times.
      Yes, in effect, the tax credit is a gift to those who can afford the negative economics that EV’s have at the present, but the point is to accelerate the adoption of the technology, and to establish an industry that will give us a chance to invest in our own country, since business (and the wealthy in general) aren’t the ‘risk takers’ that they used to be.
      That’s exactly what I’m saying – the aversion of business to risk is why the government has to invest in the future of this country. This tax credit is one way, the plan to level the corporate tax rate to a more equitable levels (comparable to the rest of the world) is another, though those who benefit from loopholes in the existing tax law will lobby their asses off to keep those loopholes, which essentially will stall the effort, and leave smaller businesses “in the lurch”. The big boys will have to show some patriotism (to paraphrase the President here) to allow the corporate tax law changes to help all businesses.

    • 0 avatar
      windswords

      Were actually 15 Trillion in the hole. That 1.3 is this year’s addition. Obama spent more in his first 8 months than the first 8 years in Iraq. The scope is so large that most people can’t even grasp the size of it. By the way, the 35 billion that Ryan and Republicans want to cut this year is chicken @#$%. I’m very disappointed. They better start getting serious.

    • 0 avatar

      Amen, JKRoss! Talk of “investment” is bull hockey. I doubt the House will go for this. The greenies are staggering from one failure to another. Here’s the latest: http://washingtonexaminer.com/politics/2011/02/green-energy-plant-sucks-subsidies-then-goes-bust
      Let the dollars flow to what the market will support. I’m sick of propping up these absurd schemes.

    • 0 avatar
      Mark MacInnis

      I’m from Michigan, and plenty of us folks here also think Ms. Stabenow is full of shyte.

  • avatar
    Robert Schwartz

    What is it about bankrupt that these &^%$#@ politicians don’t understand.

  • avatar
    Jonathan H.

    I think these idiots spend more time trying to come up up with an ambiguous, shiny-happy name for these bills than they do on crafting useful legislation. Why don’t the attach a kid’s name to it for full effect? We could call it Megan’s Charging America Forward Act.

  • avatar
    FromaBuick6

    Great.  More money we don’t have to pay for cars we don’t want.  I swear I must be living in some sort of alternate reality…I’m going to wake up at some point, realize this was all a dream and remember that we’re not actually this stupid.
     
    Right?

  • avatar
    vww12

    But man, you gotta invest in the future!
     
    Like the Range Fuels cellulosic ethanol plant in Georgia that shut down in January 2011 after pocketing a $76 million grant from the US Dept of Energy, plus $6 million from the State of Georgia, plus an $80 million loan guaranteed by the U.S. Biorefinery Assistance Program.

    See, if we throw enough subsidy around, plants get built, politicians do pressers, people pocket the cash… and  then while no one is paying attention you shutter the plant!

  • avatar
    thoughtchallenge

    GM recently announced a major improvement is on the way for the Volt’s battery.  Its a change in the Cathode material, which is said to vastly improve the batteries performance.  Improved charge times, improved life, more charge out of a smaller batter.  The current battery is setup to only discharge 2/3.  This improvement will enable the next generation to use a smaller battery by utilizing more of the remaining, along with the other improvements mentioned.  The likely result of this will be a more affordable Volt, with a middle seat in the rear.

    The naysayers need to do their homework, the U.S. has spent trillions on the wars in oil rich Iraq.  Okay, forget your dogma about what the war was over, the fact remains that Iraq bought their weapons with oil purchased by American and European consumers.  Furthermore, the U.S. gives billions of dollars to oil companies in the form of tax breaks and other goodies every year.  A few billions to EV consumers to prime the pump of EV technology only seems appropriate. 

  • avatar
    gslippy

    The only way the US can produce battery cells (not packs) long-term is with an eternal subsidy, and with a probable relaxation of environmental standards to deal with the nastiness that battery production entails.  This is why cells are produced elsewhere – cheap labor and less regulation.

    And then someone should demonstrate how to readily recharge a 350-mile pack overnight at home – we’ll all need our own substations to do this so that EV range can rival that of a car.

  • avatar
    sfdennis1

    Everyone is free to bitch about this proposed tax credit JUST AS SOON as you also bitch, moan, and complain an equal amount for the ALREADY ESTABLISHED billions, and billions and F****ng BILLIONS in tax credits for oil companies (mostly Republican originated/sponsored, btw) and coal and other dirty energies, and the untold billions we spend on a military presence across the globe so you have cheap gas to swill in your big-ass SUV….

    ‘Cause that’s your self-proclaimed ‘god-given right’ to have cheap gas…but ‘cleaner’ energy subsidies? and fuel efficient vehicles that (in total) pollute less, and help to develop, refine and advance (um, the future balance of global power?) technologies, as well as and send less money to overseas oil despots, terrorists, and US enemies?

    Well, we’re broke…and, uh, well, that’s just socialism, like Glenn Beck tells me…(like ya even know what socialism is, ha!)

    Wake up, if you dare. No tax credits for new technologies? Fine, just as soon as you tell your elected officials to repeal old, dino juice tax credits as well.

    • 0 avatar
      sfdennis1

      And just to give credit where credit is due, the lack of a ‘scary Obama’ picture along with this article is appreciated.

    • 0 avatar
      rpn453

      …and the untold billions we spend on a military presence across the globe so you have cheap gas to swill in your big-ass SUV….
       
      It’s nice to think of it in such an innocent way, but I hope you’re aware that the owners of the western world are looking at a bigger picture.  The military presence does not exist for the purpose of providing cheap oil to consumers.  The oil reserves are controlled for their strategic importance to the military.

    • 0 avatar
      AJ

       

      Funny how liberals call it tax credits when it’s something they want, but otherwise it’s tax cuts for those evil rich people when they don’t. And I suppose you don’t benefit from our oil supply? You must live in a hole in the ground and eat bugs, correct? Come on, do it to save the Earth, man!

       

  • avatar
    Omnifan

    Congratulations Sen Debbie!  You’ve finally woken from your sleep and realized that you’ve done nothing for the last four years with an election coming up next year.  I guess better late than never.

  • avatar
    PeteMoran

    The idea is right, the implementation might leave a lot to be desired.
     
    In 2008 the US sent ~$351b NET overseas in oil purchases.
     
    In 2009 the US sent ~$192b NET overseas in oil purchases.
     
    The first 9 months of 2010, you were up ~26% on 2009, on target for ~$240b.
     
    That’s private money, flowing out of the country.
     
    People who say the Government is broke haven’t looked at the private spending (and private debt) stupidity. Look in the mirror USofA.

  • avatar
    mpresley

    Why not just let the market (that is, consumers) decide what they want?  Oh wait.  I forgot.  Government is about taking choice away, manipulating both supply- demand, and, above all, “helping” political cronies.  How silly of me to think about either the true desire of consumers, or whatever is left of US taxpayers.

    • 0 avatar
      PeteMoran

      @ mpresley
       
      You’ve seen what consumers want; cheap crap from China, gambling on houses, a rapacious ‘health insurance’ industry, ridiculous SUVs exporting hard cash with the consequent unfunded wars-of-choice, all collectively bankrupting the country.
       
      All the while, the place is falling apart. As a nation you’re not too bright and will allow selfishness ’til the bitter end.

    • 0 avatar
      shaker

      It’s a false choice – consumer “demand” is a carefully manipulated scheme that doesn’t always have the best interests of the country at heart.
      Short-term profit results in unhealthy food, dirty air and water, gas-guzzling cars and unsafe products. It’s unfortunate, but the “big bad government” had to move beyond the simple requirements of the Constitution to protect its constituents against the excesses of business who will sacrifice the long-term health of the country for the sake of the bottom line.
      You want to eliminate all of the “unnecessary”government? Get some ethics back into business, and it might be possible. I’m not holding my breath.

    • 0 avatar
      geeber

      Considering that our economy, driven largely by consumer choice, has resulted in dramatic environmental progress over the last 40 years, and so much wealth that the biggest problem among America’s poor is that they are too FAT (when, throughout history, the biggest worry of the poor was starvation, i.e., lack of food), I’d say that we’ve done pretty well with consumer choice.

  • avatar
    MikeAR

    Ok, there are several wrong impressions on here today. First thing is that the largest holder of US government issued debt is China. It isn’t, the largest holder of Treasury debt is the Federal Reserve, our Fed. Thanks to the Quantitative Easings, they have bought maybe over a trillion dollars of debt in the last few months with more to come. It’s stilll close but the Fed has nudged China out of first place.

    The injections of freshly created money from the Fed into the money center banks and primary dealers has debased the dollar so that food and oil prices have risen worldwide. It’a a simple law of economics. scarcity=increasing value, oversupply=declining value. No one needs to try to tell me that there is no inflation. The official inflation rate is measured ex food and energy. Ex means without, tell me how many of us do not use any food or energy.

    In short, we are broke and can’t afford further investment in anything for a long time. And all you socialists out there just remember you will run out of other peoples money eventually. Socialiam has been tried since time immemorial and has failed every time. It has an unbroken record of failure, abject failure because it doesn’t recognize that people will always act in their best interests economically. It either falls of its own weight or leads to totalitarianism because government is desperate to control and exploit its people.

    And you utopian socialists out there who long for the good old days of socialism, just remember the people at Chernobyl didn’t have a quarterly profit goal to meet and look what happened anyway. Eastern Europe, the Soviet Union and China are your rnirvanas but they were all dirty, polluted and desperately poor. Just read a little and learn for a change. Is that what you want for your country and yourself? Unless you think that you will be among the nomenklatura who is living off the sweat of the proles, you won’t be anything but a drone.

    • 0 avatar
      geeber

      Concern for the environment is directly correlated with the level of a society’s wealth. Wealth that was initially created through private initiative (which depended on sound government that protected property rights, ensured stability and enforced patent law, which benefit ALL levels of society).

      Rich societies care about the environment. Poor societies don’t have that luxury. If you are worried about starving to death, you don’t care that the air may not be pristine, or whether PETA believes that it’s cruel to eat that deer. That deer may be all that is standing between you and starvation. 

      It’s no accident that the worst environmental degredation has occurred in the Soviet Union and Eastern Europe. There was no “profit motive”…and, as a result, no profits, and therefore, no money left over to spend on pollution controls and other environmental measures that require an initial investment without immediate, tangible returns.

      Meanwhile, in the U.S., our environment has been getting cleaner for the past 40 years. Water and air pollution have dropped dramatically…today the poorest American lives in a healthier, cleaner environment than the richest American did in 1911. This will only continue, as older, dirtier vehicles are junked and continued improvements in power plants are installed.


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