Plug-in Hybrids Roll On, in Stimulus Package

President Barack Obama said yesterday that building more efficient vehicles, such as plug-in hybrid electric vehicles, is a critical part of stimulating the economy and helping the auto industry to retool. The president’s plans were supported by the Senate’s compromise economic stimulus bill that includes tax credits for buyers and manufacturers of plug-in hybrid vehicles, as well as $2 billion in direct grants for battery development and manufacturing. It also includes a tax break for new-car buyers and money for the federal government to buy plug-in hybrids and flex-fuel vehicles.

Speaking at a town hall meeting in Elkhart, Ind., Obama said, “If we don’t use this crisis as an opportunity to start retooling, then we will never catch up and be able to compete effectively against Japanese automakers, Korean automakers.”

The Senate held a key procedural vote yesterday evening on the $838-billion stimulus bill, setting up passage today and then a conference committee with the House to determine what the final version should look like.

The Senate bill contained these key provisions regarding plug-in hybrid vehicles:

  • The number of plug-in vehicles eligible for a tax credit of $7,500 to $15,000, for passenger vehicles and trucks respectively, was doubled from 250,000 to 500,000.
  • Conversions of conventional vehicles to plug-in hybrids will receive tax credits of up to 10 percent—with a cap of $4,000 for a $40,000 conversion. Conversions must be “qualified” by appropriate federal agencies.
  • Eligible vehicles will include vehicles with leased batteries, as well as two- and three-wheel vehicles, and some neighborhood electric vehicles.
  • Incentives could start immediately upon signing of the bill into law.
  • The “Cash for Clunkers” provision, which would provide coupons for consumers to sell old gas-guzzling vehicles and buy new fuel-efficient models, was dropped.

If these provision remain in the final version, Obama will move closer to achieving his goal of putting 1 million plug-in hybrid cars on the road by 2015.


  • 9691

    You are the man Obama. I’m not black, but I knew I was voting for the right candidate.

  • Boom Boom

    Let’s hope this bill gets through congress and signed into law. I hope the folks that are complaining about the “pork” see what that money is actually going towards.

  • Cash for Clunkers

    I can’t believe they dropped this! It was one of the best idea ever, IMO.

    :~(

    The “Cash for Clunkers” provision, which would provide coupons for consumers to sell old gas-guzzling vehicles and buy new fuel-efficient models, was dropped.

  • Boom Boom

    Apparently, Congress read this blog because the Cash for Clunkers provisions got ripped to shreds….

  • DJB

    It’s good to subsidize plug-in hybrids and battery research. I’m happy to see that in the bill.

    However, a tax break for all new car buyers concerns me a great deal. This would benefit buyers of gas guzzlers too. The tax breaks for ethanol-gas cars are troubling. With close to a billion people around the world without adequate food, we can’t afford to turn food into fuel thus driving up quantity demanded and price for food.

  • gok

    If we don’t have enough land to produce energy and food then we have too many people.

    In time corn will not be the primary source of ethanol it just not efficient enough to compete with gas. People were starving before the big push to turn food into fuel and they will be starving after we stop using food to make ethanol.

    Making the American automotive fleet run on a domestic fuel source (ethanol or bio diesel ) is better plan than the strategic oil reserves.

    It is important for the human race to figure out how to survive on the energy that is produced in our lifetime. We have to stop the practice of borrowing energy from the dinosaurs.

    Should we worry that when we stop using oil the people of Venezuela will starve because they don’t get any money for there oil?

  • Samie

    As I said a few days ago not sure how everything in the bill is pork. I heard an elected Republican in the Senate call all this as waste in helping promote electric golf carts. Not sure what advantage one would get out of these political games.

    I disagree with plug in conversions and fuel flex vehicles. But at least it helps create jobs and promotes greater efficiencies w/ more options for consumers. For plug-ins the question is when will they show up? Toyota could easily control the market with a Prius plug-in but we will see when Toyota wants to mass produce this concept. How about a plugin Focus or Malibu?

  • Samie

    gok

    Your comments are filled with contradictions please don’t get so bent over petroleum b/c your other solutions do the same type of things…..
    Remember the simple fact that cheaper supplies hit the market that would be imported fuels or if you create a U.S only approach lack of competition increases the chance for higher prices and straining supply…..

    “Making the American automotive fleet run on a domestic fuel source (ethanol or bio diesel ) is better plan than the strategic oil reserves.”

  • Grok

    Is the subsidy only for plug-in hybrids? does the new car buyer tax break relate to all sorts of new cars, or only hybrids/plug-ins?

  • Lost Prius to wife

    Boom Boom, I think they felt that they would have a hard time selling the idea of taking, or “buying” by credits, the older cars out of the transportation system. I guess it will just have to occur through accidents or old age car “attrition” (a pile of rust).

    DJB, hopefully the tax breaks for “ordinary” cars is substantially less than that for the hybrids and hybrid plug-ins. That would allow for some incentive for one to buy the newer technology.

    Samie, they are not put out incentives for “electric golf carts”. There will be incentives for small urban electric cars, some of which are the size of golf carts (ref. http://www.hybridcars.com/electric-car, http://www.gemcar.com, http://www.getkurrent.com, http://www.myersmotors.com). And plug-in conversions are in existence now; they’re just not OEM conversion kits. I am sure that Toyota is holding back on the lithium plug-in until both legislation and thorough testing of the lithium batteries is finished. Lithium batteries do not operate like metal halide batteries; they are truly a total different “beast”. Toyota does not want to be replacing batteries under warranty. And my bet is that Chevy Volt will be the first to the market, not Toyota. This could be trouble for Toyota for two reasons. One, Chevy will be doing their best to make this a top quality car so it sells well. Two, if the Chevy Volt price is comparably priced to the future Prius plug-in, it will be strong competition and have the “American Made” draw.

  • Samie

    Lost Prius to wife not sure if you read my comment but I was paraphrasing what a politician said “electric golf carts” that was not my opinion but the comment shows how silly some are being in Washington.

    Interesting view about GM being first to mass produce plugins. It will take a few years to get the Volt down in price and become economical so I’m sure Toyota will not easily give up their control on hybrids.

  • Lost Prius to wife

    Samie, if you were quoting a politician about the “electric golf carts” comment, and you were not stating an opinion, I did misread what you said and apologize. And you are correct in saying “how silly some are being in Washington.”

    You are right; Toyota will not easily give up their leadership in hybrids. But the 3rd generation Prius may not start out at under $23K, or even $25K (and remember: each $1K increase to any car = less buyers). And the upper end Prius, with the radar, solar roof, and other bells and whistles, I doubt will be selling for under $30K (more likely $35K or more). Now we add in $7K to $10K (maybe it will be cheaper; I think this is a good estimate for now) for the 16Kh lithium battery plug-in. This puts it right in the price range of the Chevy Volt. For example, $23K base Prius + $10K battery = $33K versus the Chevy Volt’s $34K. Or $35K upper end Prius + $10K battery = $45K versus the Chevy Volt’s $45K. Of course these prices are based off what I would consider reasonable estimates and could easily vary, and probably will vary, from what will be the actual cost.

    Should my estimates be close to true, do you think Chevy will be able to give Toyota a “run for their money”?

  • Bryce

    Exactly, except the difference will be in the drivetrain. I will be a decision of no gas (for the vast majority of drivers) or a little gas. Series or parallel. That will be the next duel out there. GM and Fisker have gone for series while Ford and Toyota have gone for parallel. We will see what comes out on top.

  • Scott

    The “Cash for Clunkers” part should have had an income qualification in it, so that lower income families or single parents with clunkers would be the ones to qualify. After all, who more than the poor need to save money on gas?

  • Lost Prius to wife

    Bryce, if one can take the best advantage of that first forty miles “out of the wall plug” on an extremely regular basis, and do not mind refueling at 340 miles and every ~300 miles thereafter on longer trips, the Chevy Volt will be very hard to beat cost wise in the long run. If one travels fifty or more miles daily without a way to recharge before coming back to the garage, and wanting to travel ~550+ miles before filling up on long trips, this would tip the scale towards the Prius in the long run. Serial hybrid plug-in (GM) definitely has the advantage for the short runs (~40 miles or less). But the power split hybrid plug-in (Toyota) has the advantage once the runs become longer (~50 miles or more). Based on most demographic models that I am aware of, the (~40 miles or less) group is the largest group (greater than 50%, but I do not know what the actual percent is).

    And we can count on Honda mixing it up with both GM and Toyota. Honda uses a true parallel hybrid system now (electric motor/generator and gas engine that run/stop at the same time and direct drives to the wheels). And one can only assume that they will produce a true parallel hybrid plug-in system. Who knows what it will be capable of doing.

  • Bryce

    It’s 78% that drives 40 miles or less a day. Which is why GM fixed on that number. In fact, they are so convinced that this is the right number that in future generations and yearly updates, the goal is to bring down cost and size of the battery pack instead of increasing range therby making it more cost effective for joe blow car buyer. As it should be, considering that it has no transmission and only a small 4 cylinder that is never under excess stress and runs in predetermined RPM ranges. The complicated drivetrain transmission if a paralell hybrid poses long term problems of lowering costs to the consumer, and profitability to the automaker. (not to mention maintenance)

  • DaveinOlyWA

    cash for clunkers would have been a perfect new cash cow for the mob. no way it could have been effectively managed on a such a large widespread scale without proper monitoring to insure the person getting the car actually drove it.

    a much better idea would be a nationwide subsidized lease program. based on the person’s ability to pay and allows them a high mileage commuter car to drive on a daily basis while still having the much larger family vehicle at home for the much less frequent times when moving the entire family is needed.

    much less intrusive than car-pooling, etc.

  • hsr0601

    There is an inventor from Wisconsin who invented an all-electric car in the form of a Ford Ranger that was shown at the KARE 11 fair booth at the 2008 Minnesota State Fair.

    It is capable of reaching 100 miles per hour in speed, has a range of 300 miles, charges in 10 minutes and is pollution free with only the pollution that is done to make the electricity to charge it.

    The inventor of this invention has, to my understanding, approached Ford Motor Company with his invention. The Ford Motor Company, in my estimation, should latch onto this idea, pronto.

    My understanding is there are members of Congress who are trying to shoot down this idea of an electric car.

    Where is there any common sense in this country?

  • Margaret

    Tax credits for buyers and manufacturers of plug-in hybrid vehicles; since there are few, if any, plug-in hybrid cars available for purchase, this is a scam. Maybe it’s a stimulus for the manufacturer but surely not one for the buyer. Why not reinstate the credit for just buying a hybrid?