|Elements of the plug-in battery pack tax credit package. Click to enlarge. Source: Michigan Senate.|
The Michigan Senate on Friday approved a package of up to $517.5 million in tax credits designed to encourage the manufacture of plug-in traction batteries in the state. The House had already approved the bill, HB 6611.
The package provides credits in four separate areas: assembly of battery packs with a minimum capacity of 4 kWh; engineering for pack integration into the vehicles; engineering for advanced battery technologies; and capital investment expenses for manufacturing facilities.
Pack assembly. The package provides up to $197.5 million for tax years 2011 through 2014 for battery packs based on a minimum credit for the 4 kWh threshold, with additional credit provided per additional kWh.
|Battery Pack Assembly Tax Credit Schedule|
|Tax year||Base credit
|Max. Pack credit||Max. total packs|
Integration engineering. The package offers up to $15 million in credits each year from 2012-2017 ($90 million total) for expenses for vehicle engineering in Michigan to support battery integration, prototyping, and launch expenses.
Engineering for advanced technologies. The package provides up to $10 million in credits each year from 2012-2014 ($30 million total) to support increases in engineering activities in the state to develop advanced automotive battery technologies. Increases in engineering expenses are measured against 2008 engineering expenses.
Capital investment. The package provides up to $50 million per year from 2012-2015 ($200 million total) for capital investment expenses for the construction of an integrative cell manufacturing facility that would include anode and cathode manufacturing and cell assembly.