US Senators Introduce Bill to Promote Plug-In Electric Drive Vehicles, Including Plug-In Conversions
US Senate Finance Committee members Senators Maria Cantwell (D-WA) and Orrin Hatch (R-UT), and Senator Barack Obama (D-IL) have introduced a bill to support the development of commercially viable plug-in electric drive vehicles (PEDVs), including pure battery-electric, plug-in hybrid electric, and plug-in fuel cell vehicles.
The bill—the Fuel Reduction using Electrons to End Dependence On the Mideast Act of 2007, or FREEDOM ACT (S.1617)—would provide four significant tax incentives:
A tax credit for consumers who purchase plug-in electric or plug-in hybrid electric vehicles. Freedom Plug-in Credits would cover the consumer purchase of vehicles which use batteries and which plug into the electric grid for at least part of their power. This would include plug-in electrics, plug-in hybrids, and others.
The amount of the credit is a $2,000 base plus $400 for each kilowatt hour of traction battery pack capacity in excess of 2.5 kWh, with a cap of $7,500 for passenger vehicles of up to 10,000 pounds. A GEM (gasoline-ethanol-methanol) flex-fuel plug-in or a plug-in vehicle warranted by its manufacturer to run on biodiesel receives an extra $150. The same is true for heavier duty vehicles, except that the caps are scaled up for each vehicle weight class and range from $10,000 to $20,000.
A tax credit through the end of 2010, for consumers who convert their existing hybrid electric vehicles to high quality plug-in hybrid vehicles. The credit is either the amount calculated as above (with a $4,000 cap), or 50% of the cost of the conversion pack, whichever is less. Only kits that are of a standard configuration, mass-produced, and certified by NHTSA would qualify for a Freedom Conversion Credit.
First-year expensing for the US manufacture of plug-in vehicles and of major components of plug-in vehicles, such as batteries, electric motors, and electronic controllers; and
A tax credit for electric utilities that provide rebates to customers who buy plug-in vehicles. The amount of the government reimbursement would be based on the rate of greenhouse gas emissions for each utility.
With the rapid industrialization of countries like India and China, the demand for gasoline is unprecedented, and that’s translated into higher costs at the pump. We’re already feeling the pain of that, and it’ll get worse unless we start shifting our transportation sector away from liquid fuels and on to electrons.—Sen. Hatch
US Representative Lloyd Doggett (D-TX) has introduced similar legislation (H.R. 1331) in the House (earlier post), and expects the Ways and Means Committee to consider it by the end of the month.
(A hat-tip to Joe!)