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There are many, many, many issues to consider with this announcement. If you want to really dig deep into this consider some of the comments flying all over the place on the Volt reader comment site. I'm not an expert on taxes by any means but for the average Joe looking to buy a Volt or other EV I'm sure there will be many sales guys at the dealership saying "sure, you'll get the whole $7500 tax credit" when you really might only get $4-5k. And, I do find it interesting that they stipulated the tax credit based on battery kwh. Here are a few comments from the Volt site to stir the pot:
*** The dealers will mark the price up with diddly-boom dealer installed options (floor mats, mudguards, undercoat, paint protection…) to make up the difference. That’s what happened with the Prius when the tax credit was still available. Now that gas prices have gone up, they’re doing more of it. A tax credit counts directly against your taxes. A tax deduction reduces your adjusted gross income, for tax purposes ***
*** I haven’t seen the language of the tax credit, but it sounds like GM is being rewarded for having a larger “raw” kwh pack rating… even though they only use 50% of the packs capacity. So if another vehicle used EnerDel’s packs where they use 95% of the packs capacity, they are penalized with a smaller tax credit.
In addition basing the credit on the size of the battery pack (raw or usable) rewards automakers for building bigger and heavier hybrids even if they get relatively poor fuel or energy (in case of plugins) economy.
The tax credit should have, for plug-ins, based on it’s battery only range (for the Volt 40 miles). In any case, this bailout package was so full of pork, never mind the huge cost of the financial system bailout itself, that this tax credit is just small fries in comparison, and I’d still prefer to see any tax credit promoting EV’s than to bail out wall street which would have worked itself out (look at the competing private industry bid for Wacovia as to how free markets should work).***
*** Essentially, only the first 437,500 Volt buyers will get the tax credit; this is a maximum number. The 437,501st buyer & all subsequent buyers after that will not get the tax credit.This is assuming, of course, that the tax credits would not be renewed upon their expiration. ***
*** When I purchased a Prius, it was under the same type of tax credit. I was supposed to get $3300. However, due to other deductions I had already taken, I was only able to get $800 of the credit. I think this is very misleading on the part of the government. If you say $3300, you should get $3300. So be a little suspicious of the $7500 tax credit. ***
*** But remember that if you are hit by the Alternative Minimum Tax, you are not eligible to take tax credits and that a tax credit only applies against tax that you owe. If you don’t owe $7500, you will not be able to use the entire credit. ***
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