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Senate Version of Bailout Bill has PHEV Credits

The revised bailout legislation passed by the US Senate on Wednesday (H.R. 1424)—which has ballooned from an original 3-page plan from Treasury Secretary Paulson to the 451-paqe bill approved by the Senate—contains among its many other new provisions a tax-credit for plug-in hybrid electric vehicles.

The credit is a base $2,500 plus $417 for each kWh of battery pack capacity in excess of 4 kWh, to a maximum of $7,500 for light-duty vehicles; $10,000 for vehicles with gross vehicle weights of more than 10,000 but less than 14,000 pounds; $12,500 for vehicles with a GVW of more than 14,000 but less than 26,000 pounds; and $15,000 for any vehicle with a GVW of more than 26,000 pounds.

Phaseout of the credit is to begin after the total number of qualified PHEVs in the US sold after 31 December 2008 is at least 250,000.

Qualifying vehicles must have a battery pack with at least 4 kWh of capacity—a provision that will preclude the inclusion of the first generation of Toyota PHEVs as well, potentially, as other lower all-electric range plug-ins.

(H.R. 1424 was originally proposed in 2007 to require equity in the provision of mental health and substance-related disorder benefits under group health plans, to prohibit discrimination on the basis of genetic information with respect to health insurance and employment, and for other purposes. It was entitled the “Paul Wellstone Mental Health and Addiction Equity Act of 2007.” On 1 October 2008, the Senate decided to use it as the vehicle for the economic rescue legislation.)




This is a dream bill for GM’s Volt ambitions and any other producers of electric or range extended EVs. This bill also contains an extinction of the subsidy programs for wind and solar energy as far as I understand.

It is not a fix for the current bad-debt crisis but it should be able to slow it down to some degree. The interbank credit market needs to get going again and this bill could be what it takes to do that. Otherwise this crisis will become a major recession very quickly were even ordinary people with healthy finances are unable to obtain loans for car purchases or a house purchase simply because the banks themselves can’t get the credit they need.

The biggest risk about this plan is that it has been made so quickly it is almost certain to be full of issues that are not well considered. The markets would be better off in the long-term if this plan was not made in a hurry but if they took a few weeks to get it right. I am not sure it will pass this time either or that it is very clever to do so but it should be passed within a few weeks.


Correction: The post above said >extinction< but the intention was of cause to say >extension<.



I say Ignorance and freedom is incompatible let wall street take it on the chin I would have too, wouldn’t u?


Will this include BEVs like the Aptera? I hope so. I know it will include the Typ-1h -- if the battery pack is 4 kWh (forgot how big its battery is supposed to be).

Sneaky these Senators -- putting the minimum battery size just above that of the new Prius... It really is a giveaway to the Volt.


There is also a clause in H.R. 1424 that says:


Its section 504 on page 300. Link below to download the bill from the Senate's website. The bill goes on to say that the arrow cannot be more than 5/16" in diameter and that they cannot be "finished or laminated." That's right people, its all going to be ok. We're not taxing the arrows anymore...


Wow. Just read the details. That really is a phenomenal handout to GM. I'm not even mad. I'm impressed.


The thing that really annoys is that all these tax credits will probably give EVs and PHEVs and low carbon emission vehicles an unfair advantage over good old gasoline vehicles. Our goal is to speed the electrification of transport but can't we do it by giving more money to foreign manufacturers? Why should US tax dollars remain in the US when we could subsidize the competitors as well?

Strikes me as jingoistic pablum that may well make the air cleaner, the roads quieter, wean us off foreign oil, confront global warming, and provide jobs for Americans - but it does nothing to speed our global agenda.


I'm just fine with the US's money staying in the US. It's the big 3 who need to be incentivized to build PHEV's, and hopefully now they are. Plus I live here and given our current situation, we need to hold on to our money.

Usually I find earmarks and what not as annoying as everyone else, but this time it looks like they've got Bush by the balls, and they're getting in some good stuff that he'd never usually allow. I really hope this works for the economy, and for PHEVs.


NRG Nut was obviously using sarcasm "tongue in cheek" to spout the same type of garbage many posters here at Green car congress do.

BTW - EVs/PHEVs do nothing to make highways quieter and if there is just the slightest amount of rain the city streets won't be any quieter either.


While people obsess about wooden arrow taxes, our economy goes down the tubes. Get a grip people, pass this thing and let's get on with all the other things we have to do in the coming months to prevent complete collapse.

Jack D

This all sounds wonderful for GM, but the truth is that it is another case of the gov't picking the winning design.
There may be other ways of making a car more efficient than using bigger batteries. Is coal (producing the electricity today) really that much cleaner, or any cleaner, than petroleum?

What if the vehicles are using Bio-Diesel from Algae which is American, home grown, carbon neutral, etc etc.

Where do you think these batteries will come from? They are currently coming from Asia. They have terrible recycling issues.

I'm ok with batteries being subsidized if the money also goes to other things, in particular bio-diesel which could also be a solution...possibly a better solution given that it has no need for new infrastructure.


@Jack D,
I have to agree with you. I'm starting to feel that bio-fuels may be something we're overlooking.
Not that silly ethanol, but bio-diesel and in particular butanol which actually can be used instead of ethanol, has no side effects with current infrastructure, can be created from the same feedstocks OR algae and can replace gasoline 1-1 instead of the pathetic 60% energy density of ethanol.

It can also be created from the same sources as ethanol so why even bother with that stuff?

Anyway, I do disagree with you that it is still good to do some kind of program to promote batteries. Of course, this bill is strictly targeted at GM's Volt. It looks like this is a GM bailout plan in disguise.


Why am I being forced to buy a car that only GM can build? I have friends and family that work for Nissan, right here in the US! They are going to produce hybrids right here in the US and this bill precludes the design they are doing because it ONLY matches up with GM's current Volt design.
Their are parallel designs coming from Ford as well that will be excluded because they did a design that happens to not have over 4kWh...but at least they are affordable! I can't spend $40,000 to buy a Volt just to get a tax credit to bring it back to $33,000. Come on guys, stop picking winners in Washington.

It's GREAT to give incentives to more efficient cars, but why let one companies lobby efforts dictate what all of us have to buy???


Other Dave,
I happen to think that GM has the best design with their "strong hybrid" design, at least in the long run. There is nothing stopping these other companies from building the same kind of design.

Of course, now I'm doing the same thing that the gov't is doing and "choosing a winner" without waiting to see what other companies will come up with. LOL

Yes, this is clearly the lobbying efforts of GM setting a standard for all of us, but hopefully it will be the right direction since they already have Congress ramming it down all of our throats.


Two years ago - the whining centered on the non-appearance of a mass produced EV/BEV/PHEV. Now there is (more than) one - the greens hammer on Congress to pass tax incentives to adopt new technology and they do. Remember the previous HEV tax incentive of $3,500.00 went (almost) entirely to Toyota Prius - made overseas. So now the incentive favors a U.S. product and suddenly green wisdom thinks it not so good. Huh? Get real people. Either you want effective PHEVs with good AER or you want to tank GM. Can't have it both ways.

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