Tax Credit for $100,000 BMW Hybrid: Bizarre and Wrong
In one more sign of the need to overhaul of U.S. energy policy, the Internal Revenue Service has certified the 2011 BMW ActiveHybrid 7 for a tax credit of up to $900 under Alternative Motor Vehicle rules.
BMW calls its ActiveHybrid 7 “the fastest-accelerating hybrid sedan in the world.” Acceleration to 60 mph in less than five seconds, and a top speed of 150 mph, will rank it among the fastest sports cars in the world. The 455-horsepower vehicle, which carries a 4.4-liter twin-turbo V8 engine and sells for $103,125, is rated at 20 miles per gallon in combined highway and city driving.
The ActiveHybrid 7 uses turbocharging, direct injection and a mild hybrid system with lithium batteries to produce an 18 per cent improvement compared to the non-hybrid 750i/Li. The premium for the hybrid model is approximately $30,000 over the conventional 7-series sedan.
Hybrid or not, the use of taxpayer dollars to support the purchase of the BMW ActiveHybrid 7 is wrong in many obvious ways. The $900 credit is not an effective or necessary incentive for purchasing the ActiveHybrid 7. In addition, the environmental benefits of a V8 455-horsepower BMW are negligible at best. Meanwhile, tax credits for the most fuel-efficient hybrids from Toyota, Honda and Ford are no longer available—and there’s no sign that the government intends to restore them.
The certification of the $900 credit highlights the problems of the government choosing specific technologies to reward with incentives—rather than devising policy to encourage goals, such as increasing fuel efficiency or reducing emissions.
The real impact of the ActiveHybrid 7 incentive will be small, because the vehicle will sell in very low volumes. BMW sold 7 units of the ActiveHybrid 7 in May, the first month of reported sales.