#TaxCredit

The Biden administration held another meeting with automotive executives about how to ensure electric vehicles go mainstream. But this time it included Elon Musk, who runs the most successful EV brand in the entire world.

After taking criticism for shunning the Tesla CEO in earlier meetings, senior officials held an event on Wednesday where he and other industry leaders could contribute as to how the United States should handle a national charging infrastructure and spur adoption rates. Despite Musk having often expressed a dissenting opinion in regard to President Biden’s strategy, the White House said that the meeting was productive and resulted in a “broad consensus that charging stations and vehicles need to be interoperable and provide a seamless user experience, no matter what car you drive or where you charge your EV.”

It looks like General Motors won’t enjoy its tax incentive advantage over Tesla for all that long. The maker of the Chevrolet Bolt EV and Volt plug-in hybrid (“extended-range EV,” in GM parlance) told Green Car Reports it will pass the 200,000-unit green vehicle threshold this quarter, meaning a halved federal tax credit for those vehicles starting in April of next year.

No longer will the base Bolt sticker for under $30,000 after factoring in the $7,500 credit.

Details on Tesla’s “free” Model X for the first 10 referral buyers have been few since the beginning. First it appeared that the program would be limited by time, then it appeared it would be limited by country, now it appears that it’ll be limited by continent.

The first person to refer ten friends in each sales region— North America, Europe, and the Asia-Pacific — will receive a free Founder Series Model X.

But even more unclear is exactly how Tesla will give its winner their new Model X. Depending on how that happens, there are very few scenarios in which the new Model X owner (with 10 friends wealthy enough to buy new Model S cars) wouldn’t qualify for up to $7,500 back from the feds.

One of the bloodiest battlegrounds in the electric car wars is the topic of government subsidies for EV purchases. In the American case, it’s the $7500 federal tax credit for EVs and the various state incentives including California’s current $2500 rebate. In Europe and Asia, a variety of EV promotion schemes have frequently been the subject of acrimonious debate. Much of the disagreement arises regarding the perceived “fairness” of rebates: defenders of subsidies generally claim that they help put EVs in the hands of middle-class consumers, with critics charging that they only serve to line the pockets of the wealthy. Now one California lawmaker wants to revamp the state’s subsidy program by capping the income level for households receiving EV rebates.

Washington’s campaign to put you in an EV will cost the taxpayer $7.5 billion through 2019, and it’s all for nothing, says a report by the Congressional Budget Office.

A few days ago, the Washington Post demanded the execution of the $7,500 tax credit for EVs. Republican Congressman Mike Kelly is ready to comply. He introduced H.R. 3768, legislation that would repeal the $7,500 tax credit for plug-in electric drive vehicles. The odd thing is: Kelly is owner of Kelly Chevrolet-Cadillac in Butler, PA. The not so odd thing is: He knows firsthand whether the car is worth tax payer money or not. Kelly does not think so:

An op-ed piece in The Washington Post praises the wisdom of Congress that refused to renew the 45-cent-per-gallon tax credit for corn-based ethanol and the 54-cent-per-gallon tariff on imported ethanol, thereby exposing alcohol to the rough treatment of the market. Also not extended was the tax credit for installing a charger at home or in a commercial location.

The WaPo thinks killing the $6 billion incentive to turn corn into fuel, and letting EV owners buy their own charger was righteous, but only a half-measure. Congress should have finished the job and should have finished handing out $7,500 tax credits to buyers of EVs. The WaPo thinks it’s a waste, and the technology is going nowhere.

The main tool for the government’s crusade to get one million plug-in cars on the road by 2015 is the “Qualified Plug-In Electric Vehicle Tax Credit,” a credit that returns between $2,500 and $7,500 to purchasers of a qualifying vehicle. To qualify for the minimum $2,500 credit, a vehicle must have a traction battery with a minimum of four kW/h, and the credit adds an additional $417 in credits for every kW/h above the minimum. Why? Well, you might think that it’s because the DOE has done its research and determined that larger battery packs deliver more social benefits… at least until the 16kW/h limit (the exact size of the Chevy Volt’s battery), where the credit tops out at $7,500. But according to new research by Carnegie Mellon’s Jeremy Michalek, that basic assumption doesn’t appear to be true at all. In fact, his latest paper argues that the government would actually be better off subsidizing smaller, not larger, battery packs.

Bloomberg’s running a lede that’s sure to ruffle a few feathers at Nissan’s communication and customer service organizations this morning: “Nissan Motor Co. is aggravating the customers it needs most.” How so? According to the report

Nissan, which wants to become the top seller of electric cars, repeatedly delayed deliveries to some U.S. buyers who reserved the first 20,000 Leaf plug-in hatchbacks, according to interviews with customers. They said Nissan unexpectedly dropped some from the waiting list temporarily, asking that they reapply if they couldn’t prove they’d arranged installation of home- charging units that can cost more than $2,000.

Nissan has long admitted that the Leaf rollout would be a challenge, and the recent tsunami-related chaos in Japan hasn’t helped. But Bloomberg doesn’t quantify how many customers have been dropped due to their lack of charging system installation, other than to report that 45% of the 20k customers who reserved Leafs by last September have continued the ordering process. And it turns out that the delays aren’t irritating so much because of Nissan’s intransigence or lack of transparency, but because certain buyers stand to lose their California tax credit before their Leaf arrives.

The Washington Examiner reports that, having previously moved its lobbying efforts to an exclusively in-house arrangement, GM is now hiring outside lobbyists again [UPDATE: GM’s chief in-house lobbyist just retired]. GM has rehired its old lobbying firms the Duberstein Group and Greenberg Traurig, and has added GrayLoeffler to its K-Street roster. GM is also keeping the “well connected” Washington Tax Group on its lobbying payroll, having picked up the firm’s representation in 2007. From these firms, some 18 lobbyists have registered as GM representatives, including a list of what the Wasington Examiner calls “well-connected revolving-door players from both parties.”

Former Reps. William Gray III, D-Pa., and Jim Bacchus, R-Fla., are both on GM retainer, as are fabled Republican and Democratic operatives Ken Duberstein (White House chief of staff under Ronald Reagan) and Michael Berman (counsel to Vice President Walter Mondale and campaign aide to every Democratic presidential nominee since LBJ).

Heading GM’s lobbying push for expanded R&D tax credits is the Washington Tax Group’s Gregory Nickerson, formerly the top lawyer at the tax-writing House Ways and Means Committee and the staff director of the Subcommittee on Select Revenue Measures. Nickerson’s partner is Mary Ellen McCarthy, formerly the top lawyer at the Senate’s tax-writing Finance Committee.

Zacks Investment Research reports that Ford will invest $500 million in Michigan for developing and building batteries for their hybrid and electric vehicles. In return, they have asked the Michigan government for a tax break between $85 to $120 million. Michigan haven’t confirmed whether they’ll give this tax break, which is handy because Ford have indicated that they will look elsewhere if the tax break isn’t given. This investment will create 1000 jobs. Each job will cost at least $85000? Shocking!

Battery electric vehicles are widely seen as the most promising long-term automotive greentech, but they’re also hardly poised to take over the industry. A host of issues are keeping EVs out of mainstream acceptance, ranging from battery capacity issues to the lack of a charging infrastructure. For a group of electric transportation-sector businesses though (including Nissan, which is heavily hyping its Leaf EV), it’s nothing $124b in government support won’t fix. A press release on the Electrification Coalition’s “Roadmap” explains:

The Electrification Roadmap presents a bold and specific vision: By 2040, 75 percent of light-duty vehicle miles traveled in the United States should be electric miles. As a result, oil consumption in the light-duty fleet would be reduced by more than 75 percent, and U.S. crude oil imports could effectively be reduced to zero… “It is absolutely crucial that all of the key elements of an electrified transportation system are introduced in a highly coordinated fashion and in a way that is effective, affordable, and appealing to actual American consumers,” [David Crane, President of NRG Energy] said. “Introducing all of the separate elements, from cars to infrastructure, simultaneously in select communities across the country will move electrification beyond the early adopters; policymakers will witness the national benefit derived from a new kind of transportation system while consumers will benefit firsthand from a new kind of driving experience.”

Saw this ad on TV for the first time whilst fantasizing about a Rachel Maddow vs. Bill O’Reilly death match (rules upon request). The first thing that struck me: the Aptera is the only car in the world with less sideways visibility than the 1938 Bugatti Type 57SC Atlantic Coupe. Second, what is that hulk those guys are washing, and does the man from Griot’s Garage wince every time he sees that paint-scratching action? And lastly, I reckon the Volt has had its day in the sun. It’s not a profound Insight, but by the time Chevy’s not-so-slammed electric/gas hybrid appears, the Volt’s gee whiz factor will have drained off into the gestaltosphere. The Volt will have to compete with real cars in the real world, offering real advantages to real buyers. As you may have noticed, GM isn’t so good at reality. Still, where there’s a will, there’s an Uncle Sugar. The feds are lining up some $10k worth of tax credits for GM’s Hail Mary. Per vehicle. Is it enough? And will the clock run out before The General can even send in the special teams? Your guess is better than theirs.