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05-10-2008, 10:11 AM
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Bush signs $7,500 plug-in hybrid tax credit bill into law
Bush signs $7,500 plug-in hybrid tax credit bill into law
 A new-generation of plug-in hybrid vehicles may still be a couple of years away from reaching showrooms but the $700 billion Wall Street bailout bill passed by Congress and signed into law by President Bush today secures a tax break of up to $7,500 for the high-tech cars. Carmakers lobbied for the bailout bill's passage right up to the deadline for the vote, as the auto industry's future is closely tied up with the fortunes of the nation's leading lending institutions. "The message from the auto executives was something needed to be done or we were going to see layoffs in the coming weeks," said Michigan Congressman Joe Knollenberg. "They were legitimately pretty scared." The inclusion of the plug-in hybrid tax credit is a bonus that could help fuel recovery in the next several years. General Motors spokesman Greg Martin said of the credit, "consumer tax incentives are traditionally one of the most effective ways to accelerate early adoption of energy-saving technology," reports The Detroit News. The new tax credits for plug-in vehicles will range from between $2,500 to $7,500, with factors such as battery capacity determining how much owners would receive. Cars like the Chevrolet Volt, due in late 2010, would be eligible for the maximum credit of $7,500. The total cost of the program over the next ten years is estimated at $1 billion - a significant sum of money, but a drop in the bucket next to the $700 billion bill it's a part of. To meet the tax incentive's standards, a plug-in vehicle must have a battery with a minimum capacity of 4kWh, though an additional $200 of tax credit is added for every kilowatt-hour thereafter, which is how the Volt gets to the maximum $7,500 limit with its 16kWh battery. Unlike the tax credit before it for traditional hybrid vehicles such as the Toyota Prius, which phases out for the customers of any company that sells 60,000 qualifying vehicles, the latest bill includes a measure that covers the first 250,000 vehicles sold.
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