Three federal electric vehicle incentives expiring at end of 2011

2011 may have been the first full year that multiple mainstream plug-in vehicles were available in the U.S., but it will also be remembered – most likely – as the year when the U.S. federal government was offering the most money to plug-in vehicle buyers (based on the number and types of incentives offered, not in total funds spent). As of the end of 2011 – i.e., three short days from now – three incentives will go the way of an ethanol subsidy. A fourth – arguably the most important one – will remain on the books.

The three federal electric vehicle tax credits that are set to expire are the $1,000 (maximum) to install a home charging station, the $2,500 (max) for two- or three-wheeled EV that have 2.5-kWh batteries or larger and the $4,000 (max) for converting either a hybrid to plug-in or a regular ICE to EV power. The big tax credit that's sticking around is the $7,500 (max, depending on the size of the battery) for buying a new plug-in vehicle. This credit is set to phase out on a manufacturer-by-manufacturer basis once an automaker sells 200,000 plug-in cars. That could take a while, if the credit is left alone. Plug In America's legislative director, Jay Friedland, thinks this may not be so easy. In a recent email to PIA supporters, he wrote:

What keeps me awake at night are ongoing challenges to the overall plug-in car tax credit. I am sure you have heard all of the major media talking about the Payroll Tax Extension; but what you may not have known is that EVs are part of the political football, too. Here's what is going on:

We fought hard (and won!) to get all of these expiring electric vehicle tax credits included in the "energy tax credit extenders package," covering items like the production tax credit for electricity (wind/solar) and the 30% investment tax credit for manufacturing equipment. And with support on both sides of the aisle, we made it onto the list under consideration by the Senate Finance committee.

Now the House has finally joined the Senate in passing a two-month extension on the Payroll Tax Holiday, Unemployment Insurance, and Medicare reimbursement; but at the final moment all other extenders (including ours!) were pushed aside. These EV tax credits are now in play for the full fix, which could come at the end of the two-month extension.

PIA encourages plug-in vehicle supporters to take action and keep the credits in place.