Chevy Volt and GM Get Big Boost From $700B Bailout Vote Today

[Matt Herring]

$7500 Tax Credit for Purchase of Chevy Volt. Also tax credits for purchase of other electric vehicles. Wonder if this will change point of sale pricing on future electric vehicles since they know what refund you will be receiving. Kind of like marking up the cost to include the tax credit.

Follow the link to read about the story. Keep in mind...while this sounds great...this article is from the GM Volt website...

GM-VOLT : Chevy Volt Electric Car Site » Blog Archive » Along With Wall Street Bailout, Plug-in Car Tax Credit is Passed: Chevy Volt Now $7500 Less

[cfg83]

Matt -

Eeeeen-tay-rest-ink. I will have to watch for this. I wonder what this means :

This provision provides a tax credit for buyers of plug-in electric vehicles. It provides a base of $2500 plus an additional $417 per kwh for batteries greater than 4 kwh. For the Chevy Volt, that works out to $7500 per car, a number GM had lobbied for.

What would a Prius qualify for? Would the aftermarket package to make a plug-in Prius qualify for this? If yes, then a $7500 tax credit. would just about cover the cost of the package. But, a tax-credit is not a rebate. Assuming a 30% tax rate, I think a $7500 tax credit would be around $2,250 back on your taxes. Does this sound right?

CarloSW2

[Matt Herring]

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. ***

[cfg83]

Matt -

I find this comment very telling :

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.

That would be in line with their Hybrid-SUV strategy.

CarloSW2

[Matt Herring]

And, don't forget...this isn't a tax credit for just the Volt. It's for all EV's being sold. It includes the first 250,000 EV's at full $7500 tax credit, 50% for next two quarters and 25% for final two quarters. Obviously, the Volt will benefit greatly as it's release date coincides nicely with the beginning of the tax credit.

[Matt Herring]

CFG83 -

Not sure if you were just comparing to a Prius for numbers-sake but a Prius would not qualify for the credit as far as I understand the language..."plug-in electric vehicles"...with emphasis on PLUG-IN...read below

"This provision provides a tax credit for buyers of plug-in electric vehicles. It provides a base of $2500 plus an additional $417 per kwh for batteries greater than 4 kwh. For the Chevy Volt, that works out to $7500 per car, a number GM had lobbied for."

[cfg83]

Matt -

Originally Posted by Matt Herring

CFG83 -

Not sure if you were just comparing to a Prius for numbers-sake but a Prius would not qualify for the credit as far as I understand the language..."plug-in electric vehicles"...read below

"This provision provides a tax credit for buyers of plug-in electric vehicles. It provides a base of $2500 plus an additional $417 per kwh for batteries greater than 4 kwh. For the Chevy Volt, that works out to $7500 per car, a number GM had lobbied for."

Yeah, it probably wouldn't qualify. I asked because I was thinking that the plug-in Prius dudes could buy a Prius off the lot, add the plug-in package, and resell it for the credit. But, I don't think it would make $$ sense for the plug-in dudes to buy the Prius for reselling.

Anyway, Toyota plans to have a plug-in Prius version for the next gen. But it's not clear to me how big the battery pack will be :

Toyota Will Offer a Plug-In Hybrid by 2010
2010 Toyota Prius Plug-in Hybrid - Review of Next Generation Prius - Popular Mechanics

CarloSW2

[NeilBlanchard]

Hi,

The Aptera Typ-1e (aka Local) will get ~$4,100.

And BTW, the Aptera will be on 60 Minutes this Sunday evening, in the segment called "THE RACE FOR THE ELECTRIC CAR".

[orange4boy]

"We lived on the side of the highway in a shoebox..."

Up here in Canada our present Bush clone Government just cancelled an efficiency rebate for buying a FE car, has not set foot in an EV factory, (we had two, one moved to Pakistan) and made LSV's illegal pushing the responsibility onto municipalities to legalize patchwork style. Vancouver and Victoria just allowed them. only 687 muni's to go.

We are in an election cycle here too so pray for "change" for us. I'll be praying for you folks. In an EV kind of religious way.

[Matt Herring]

Neil,

Thanks for the heads up on the 60 Minutes airing this Sunday...I'll definitely tune in!

While I'm probably not a candidate to purchase a vehicle in 2010 (3.5 years left on my current auto loan and usually like to go auto payment-free for at least 2-3 years) I'm deeply interested in the whole process of the development, marketing and eventually the sale of the PHEV's.

Alot can change between now and 2010 or now and when I'm ready to purchase a new vehicle so I'm interested to see what comes about in the next few years. Alot has changed in just the short time the Prius hit the market a few years ago!