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This'd be a sweet deal for automakers. At a kick-off event for the DC Auto Show today, Representative Sander Levin (D-Royal Oak, MI, pictured) said he will introduce a bill to increase the limit on how many plug-in vehicles an automaker can sell before the $7,500 (max) tax credit expires from 200,000 to 500,000. Sander's younger brother, Sen. Carl Levin (D-MI) will introduce the bill in the Senate.
Sander is the ranking member of the House Ways and Means Committee. Carl talked last fall about the possibility of eliminating CAFE standards all together in favor of a "longer-term approach that gets us to a better result."

Meanwhile, Vice President Joe Biden expanded on President Obama's State of the Union plug-in vehicles plans during a visit to battery maker Ener1 today. As we already noted, the Obama Adminisration wants to changes the tax deduction to an on-the-spot rebate. Obama also proposed increasing federal subsidies for "vehicle technologies" to almost $590 million, an increase of about 90 percent

[Source: Detroit News]


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  • 22 Comments
      • 3 Months Ago
      Tax credits are the wrong way to go. Rebates cost no more and help those who need it most. As a special case consider seniors like me who have had their incomes reduced drastically by Fed policy of virtually zero interest on savings in order to bail out the banks. If you have a million dollars in savings and keep it in something safe like CDs, you will be lucky to get $5000 in incomes. Therefore while you can afford to buy an electric car, you will get little or no help from the income tax credit. On the other hand the bailed-out Wall Street operatives with their big bonuses get the full income tax credit.
      • 4 Years Ago
      Raising the ceiling for plug-in vehicles and electrics is a really dumb idea b/c it is an example of the government picking winner and losers. It never works out well.

      However, eliminating CAFE in favor of something that generates better results is brilliant.

      "Thinking it through and avoiding unintended consequences would be difficult, but the incremental gains of our current approach are achieved at great cost in terms of resources and policy struggles. We should at least consider removing those high costs – along with the EPA, NHTSA and the California regulatory regimes that have produced those costs – and putting in their place a longer-term approach that gets us to a better result."-- Senator Levin

      It's obvious he is carrying water for the car makers and the unions, but he is right.

      Furthermore, Obama's push to turn tax credits into an on-the-spot rebate are very good as well. Tax credits are too easy to cheat, and they encourage buyers to go into debt. When the tax rebate hits their bank account, do they use it to retire the debt? Not likely. On-the-spot rebates eliminate some of these problems.
      • 3 Months Ago
      Changing it from a credit to an on the spot rebate IS EXACTLY WHATS NEEDED.
      Thats what worked so great with "cash for clunkers".

      None of the... what did you earn this year? paying upfront, and dealing with maybe you will maybe you wont get the credit.
        • 3 Months Ago
        yeeaaah.....cause cash-4-clunkers was a raging success. *rolls eyes*

        The best subsidy, is no subsidy. We need to get rid of them ALL.
        • 3 Months Ago
        I like the idea of an "instant rebate", it is available to those who might not have enough tax liability to take full advantage of a tax rebate, and as others have pointed out, better encourages paying down debt.

        But it might be better to use a smaller rebate, spread out over many more vehicles, both for the total social benefits and due to lower annual cost to the government. The big problem with "Cash for Clunkers" is that it offered too much to too few people, for too short a time, and for too little of an improvement in fuel economy. The basic idea was good, the implementation was horrible.
        • 3 Months Ago
        "yeeaaah.....cause cash-4-clunkers was a raging success. *rolls eyes*"

        Cash4Clunkers was considered a huge success by everyone except the republitards.

        This proposal will get more EVs on the road, faster.
      • 3 Months Ago
      Levin is a whore to the Big 2.5. I don't trust anything he does.
      • 3 Months Ago
      I did a back-of-a-napkin calculation and determined that if there was an tax increase of only 5 cents per gallon of gas then that revenue would be enough to provide over 500,000 rebates (every year) of $12,500.
      • 3 Months Ago
      Only if the cars are BUILT IN THE US!!!
      harlanx6
      • 3 Months Ago
      This bill will be DOA! You got it, dead on arrival. the house is going to cut spending. Now that the cat is back the mice can't play. That includes hair brained green projects.
        • 3 Months Ago
        @harlanx6
        Where did you get the idea that republicans cut spending? They always explode deficits whenever they're in the majority.
        harlanx6
        • 3 Months Ago
        @harlanx6
        The couple of administrations prove you right, but things better change or we will throw them out also.
      • 4 Years Ago
      I think that if your goal is to get a lot of EVs on the road more quickly and to get vehicle manufactures to bring the technology to market then the credit should be across the board, say for the first 3 million cars sold by all car makers. That way people can still get the tax credit even if there are auto makers who have reached their limit but other car makers have not yet brought an EV to market yet.

      The hybrid tax credit was a fiasco. Toyota prius buyers stopped getting credits well before other manufacturers brought their less capable hybrids to market. The tax incentive should not be structured to give people an incentive to buy worse vehicles just to be "fair" to all automakers.
        • 3 Months Ago
        I agree that different people need different vehicles, but the per manufacturer limits allow late-comers and less impressive products gain sales because of a skewed incentive.

        The manufacturer that brings the best product in each segment to market should be the one to profit the most. If you need an SUV then get the ford escape or whatever. But we shouldn't be awarding tax credits for stuffing an electric motor in a vehicle, without regard to efficiency or fuel savings.

        2009 Model Year Hybrid Vehicles (as of 03-19-2009)
        Make Model Credit Amount
        Cadillac Escalade Hybrid 2WD $2,200
        Cadillac Escalade Hybrid All Wheel Drive $1,800
        Chevrolet Tahoe Hybrid C1500 2WD $2,200
        Chevrolet Tahoe Hybrid K1500 4WD $2,200
        Chevrolet Silverado Hybrid C15 2WD $2,200
        Chevrolet Silverado Hybrid K15 4WD $2,200
        Chevrolet Malibu Hybrid $1,550
        Chrysler Aspen Hybrid $2,200
        Dodge Durango Hybrid $2,200
        Ford Escape Hybrid 2WD $3,000
        Ford Escape Hybrid 4WD $1,950
        GMC Sierra Hybrid C15 2WD $2,200
        GMC Sierra Hybrid K15 4WD $2,200
        GMC Yukon Hybrid C1500 2WD $2,200
        GMC Yukon Hybrid K1500 4WD $2,200
        Mazda Tribute Hybrid 2WD $3,000
        Mazda Tribute Hybrid 4WD $1,950
        Mercury Mariner Hybrid 2WD $3,000
        Mercury Mariner Hybrid 4WD $1,950
        Nissan Atima Hybrid $2,350
        Saturn Aura Hybrid $1,550
        Saturn Vue Hybrid $1,550
        http://www.irs.gov/businesses/corporations/article/0,,id=203909,00.html

        So in 2009 if you wanted to buy a new vehicle with good mileage at an affordable price(thanks to a federal tax credit), you might be less likely to buy a toyota prius or ford escape because they had already sold too many units. The feds gave you an incentive to buy one of the gas guzzlers on the list above.

        Late to market + sloppy engineering + federal tax credit = profit.
        No wonder they went bankrupt.
        • 3 Months Ago
        Interesting, what exactly constitutes a less capable hybrid? Something that doesnt get the prius' 50 mpg, or hybrids that are not Toyotas? I see that Ford makes a hybrid SUV Escape that get better gas mileage than Toyota's Hybrid SUV Highlander. Or the Ford Fusion that outperforms and gets better gas mileage than the Camry hybrid. How are those less capable again? The Prius is certainly not one size fits all there feller, people need options. Nothing against Toyotas, they are great products...

        The per manufacturer limit will allow other brands to bring quality EVs to market when they are ready, rather than rush crap to market.
      • 3 Months Ago
      the problem with the rebate is that the automakers just raise the price by that same amount. it increases their profits but doesn't sell more cars.
      you can't trust these wicked people. the only way to facilitate change is to start the right car production without existing car makers because it's clear they don't care about it.
        • 3 Months Ago
        You should do it. Be sure to let us know when the DanEV hits the market!

        :P
        • 3 Months Ago
        :) give me access to minor US federal funding and it would be done in quick order. better than anyone else
      • 3 Months Ago
      I think this is a good idea. The current one (at 200,000) also expires (which is a good idea) so it only rewards auto makers who get moving with the technology - those that sit and go slow loose the credit (a fix to the hybrid credit). Taking it to 500,000 will give the automakers a few more years to work on getting the prices down on the expensive new technology (battery tech is already supposed to cut costs by 50% by 2015) while gaining additional efficiencies from scaling production up significantly.

      This proposal would facilitate more electric cars on the road getting America off more oil sooner (shout out to those places like Venezuela etc. that hate us that we keep sending our money to). The fact that gas is above $3 a gallon in the winter in the worst recession the US has seen since the depression - should be making everyone figure out we need to get off as much oil as possible ASAP, cause its going nowhere but up as the economy tries to come back (and increases oil / gasoline demand as it does so).

      Make no mistake folks - our economy isn't designed for $4 a gallon or higher gasoline, it will suck out the discretionary spending money from the economy (all that money goes to the oil companies instead of buying things) and send us back into a recession.

      The oil lobby will not want this to move forward so my guess is it will get killed by their minions in the House of Representatives (and maybe the Senate as well). But we'll see.
        • 3 Months Ago
        I agree this is a good thing. If we're ever to move the technology, it needs to reach economic volumes.
      • 3 Months Ago
      Unfortunately with the 5 cent tax increase(in addition to the other taxes already present), the government will take their share and you would probably see 1/3 or less of the actual revenue going towards its intended purpose. The remaining 2/3 of the revenue would just evaporate. This 5 cent tax increase would also be on top of the higher gas prices if oil industry subsidies are removed per the presedential address(I'm ignorant of the type and amount of subsides). A 5 cent tax increase is easier to deal with when gas is $3/gallon vs $5/gallon.
      Each tax credit or rebate given out is lost revenue for the government--yet they want to raise taxes (on the higher earners/contributors) because they don't have "enough" revenue. In reality, the government always spend more then their revenue stream-wether its 1 billion or 3 trillion $$. Its like Micheal Jackson worth $$$$$ but you spent too much and still have $$$ amount of debt. If you must have a incentive program I would like a rebate system, but the system still is bad financially.
      • 3 Months Ago
      No subsidy. Increase the fuel mileage standards of auto manufacturers and they will build small/medium size cars with hydrid technology en mass at a cheap price everyone can afford. No subsidy is needed.
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