Electric Car Market Gets Useful Jump-Start, Tax Breaks

By dancurranjr On December 25th, 2010

When Toyota unveiled its gasoline-electric Prius hybrid in Japan in 1997, car executives here scoffed that the car was little more than an expensive novelty. When Honda began selling the first hybrid in the U.S. market in 1999, the two-seat Insight was derided as cramped and impractical.

OPPOSING VIEW: Subsidies? Just say no

Eleven years later, more than 2 million Priuses have been sold worldwide, and there are about 1.5 million hybrids on the roads here, including models from the U.S. automakers. That’s still a tiny fraction of the 250 million vehicles in America, but they have helped cut gasoline use.

Now comes Round 2, as General Motors and Nissan begin delivering their first new electric cars to buyers amid some of the same sort of skepticism that dogged the early hybrids. Americans should hope the skeptics are wrong again.

The two new cars, due to be followed by models from other automakers, are promising fuel savers. The Chevy Volt can go 25 miles to 50 miles on battery power alone; after that a gasoline engine kicks in to power a generator for a total range of about 350 miles before fill-up or recharge. The more limited battery-only Nissan Leaf can travel an estimated 62 miles to 138 miles before it needs a recharge.

It’s easy to deride the new electric cars, just as it was the early hybrids. The batteries take hours to recharge, and when the Leaf is out of juice, it had better be at a plug. It presumably would be useful only to short-range commuters with no other need for the car. Both cars are small, though the Volt is no smaller than many sedans, and automotive writers say it’s as quick and responsive as a gas-powered car.

The biggest drawback, and the one critics have made much of, is the cost, and not just to buyers. The Volt lists for $41,000 and the Leaf for $33,000, so the federal government, eager to jump-start a market for electric cars, is helping with the sticker shock by shelling out up to $7,500 per car in tax credits for the first 200,000 cars an automaker sells.

There’s a downside to this. The tax code would be far better if it weren’t riddled with tax breaks such as this one. In addition, the tax credit spends money the government doesn’t have.

But those are bigger, more important issues in which the credit is a bit player. The benefit comes if electric-car technology gets cheap enough to stand on its own, providing a way to trim U.S. dependency on foreign oil, now two-thirds of our use, some of it from countries hostile to us. There’s plenty of skepticism, but the automakers are optimistic enough to invest in the technology, betting that rising oil prices will boost sales, as they did with hybrids.

One of the best arguments for tax breaks is that they helped get the hybrid market where it is today, along with gas prices and the fact that some states allowed hybrid drivers access to HOV lanes.

Those hybrid tax breaks have been phasing out as the law required — just as the tax breaks for electric cars are required to do. Electric cars must eventually live or die without government help.

As the writer of the opposing view argues, there are compelling arguments against the new cars — but there are equally compelling arguments against every other alternative to the status quo as well. Nuclear is too dangerous, coal too dirty, solar and wind too unreliable, offshore oil drilling too risky and so on.

But the most compelling argument is that the status quo — more and more foreign oil — is unsustainable. Electric cars might not be the answer, but they are an answer, and that makes them worth a try.


Tax Incentives for Hybrids, Other Greeen Cars Likely to End

By dancurranjr On December 14th, 2010

Save for a holiday miracle from outgoing U.S. lawmakers, a host of tax breaks for fuel-savvy car buyers will go away in less than a month.

But one group that won’t be shorted are electric car purchasers.

“Credits are expiring once and for all on a huge swath of new cars, unless there’s a successful lame-duck effort in Congress to extend them,” said Carroll Lachnit, features editor of Edmunds.com.

The online automotive resource said potential buyers should note the tax break situation when deciding whether to purchase a hybrid or alternative fuel vehicle.

Hybrid, diesel and compressed natural gas vehicles purchased after Dec, 31, 2010 will no longer be eligible.

“But the tax credits for plug-in hybrids like the Chevy Volt and electric vehicles like the Nissan Leaf are likely to remain in effect for several years,” Lachnit said.

Ron Montoya, features writer with Edmunds.com, cautioned that, “Tax credits aren’t the only factor to consider, especially since buyers have to wait until spring to realize the savings,”

Meanwhile, dealers may boost prices for the most desired vehicles, which could cut into the tax savings, according to Edmunds.

For some models, buyers will realize better savings if they wait until ‘hot’ models cool off, said Montoya, citing the Honda Civic GX and Hyundai Sonata Hybrid as examples.

Dozens of new models have been eligible for the federal tax credits in the past three model years. They include:

  • The special Honda Civic GX sedan powered by Compressed Natural Gas, whose few would-be buyers could receive $4,000 credits at least if they purchase before the end of the year.
  • Audi, BMW, Mercedes-Benz and Volkswagen, which manufacture models that are eligible at least until Dec. 31 for a diesel credit. Tax breaks start at $575. The highest are $1,800 for the BMW X5 xDrive35d sport utility and for the Mercedes GL-Class320 BlueTEC sport utility.
  • The 2011 Nissan Leaf hatchback and the Tesla Roadster two-door convertible. Purchasers can apply for a $7,500 electric tax credits. Similarly, buyers of the 2011 Chevrolet Volt four-door hatchback can get a $7,500 plug-in hybrid credit.
  • Various car and truck models built by BMW, Cadillac, Chevrolet, Chrysler, Dodge, GMC, Mazda, Mercedes-Benz, Nissan and Saturn. They make hybrid models, and owners of new models can receive a hybrid credit at least until the end of 2010. The credit begins at $900. At the top end is a $2,350 credit for buyers of the Nissan Altima Hybrid sedan.

Edmunds.com notes that credits begin to phase out for a manufacturer’s vehicles once it sells a predetermined total.

In many cases, most notably with hybrid models from Ford, Honda and Toyota, the federal tax programs have already been phased out.

The credits can be used only by the original owner. If leasing a vehicle, the automaker may claim the credit and pass the savings on to the consumer, according to Edmunds.com.

The full list of vehicles eligible for the tax credit can be found online at Edmunds

Hybrid and Diesel Tax Credits Will Expire At The End Of The Year

By dancurranjr On December 9th, 2010

If you’ve been putting off buying a hybrid or an alternative-fuel car, you may want to hurry up. Several tax credits are expected to expire December 31 of this year, unless there’s successful (but highly unlikely) lame-duck push in Congress to extend them.

“Hybrid, diesel and compressed natural gas (CNG) vehicles purchased after Dec. 31, 2010, will no longer be eligible,” said Carroll Lachni of Edmunds.com. “But the tax credits for plug-in hybrids like the Chevy Volt and electric vehicles like the Nissan Leaf are likely to remain in effect for several years.”

Tax credits on some hybrids from Toyota, Honda and Ford have already expired, because the companies have sold more than 60,000 models in the U.S. so far.

According to Consumer Reports, here are the cars that you can still get a tax credit for until December 31:

* Nissan Altima Hybrid, $2,350
* BMW X5 and X6 Active Hybrids, $2,200
* Mercedes-Benz ML450 Hybrid, $2,200
* General Motors full-sized SUV and pickup hybrids (such as the Tahoe and Silverado), $2,200

There are some diesel vehicles that you can also get the credit for:

* Audi A3 TDI, $650
* Audi Q7 TDI, $575
* BMW 335d, $900
* BMW X5 xDrive35d $1,800
* Mercedes-Benz GL 350 BlueTec, $1,800
* Mercedes-Benz ML 350 BlueTec, $900
* Mercedes-Benz R350 BlueTec, $1,550
* Mercedes-Benz E350 BlueTec $1,550
* Volkswagen Golf TDI, $850 (automatic)/$650 (manual)
* Volkswagen Jetta TDI, $650
* Volkswagen Touareg TDI, $575

There’s also a $4,000 tax credit available on the natural-gas powered Honda Civic GX.

On the other hand, you can still avail of the $7,500 tax credit meant for plug-in electric cars, such as the Chevrolet Volt and Nissan Leaf.

In fact, several states are offering additional tax credits on top of what you get from the federal government. See of available credits here.

However, the government grants that will supply 15,000 free electric-car chargers are also set to expire Dec 31, unless Congress extends them, Consumer Reports said.

Having said that, be careful when you buy one of the cars on the list. Dealers are likely to jack up prices on vehicles that are in demand, reducing the effect of the tax credit. Do your homework before you head out to the showroom.

Ford Hybrids Get Points for Green SUVs

By dancurranjr On June 4th, 2009

Mercury Mariner Hybrid 'Presidential Edition'Billed by Ford Motor Co. as the world’s most fuel-efficient sport-utility vehicles, the Ford Escape Hybrid and Mercury Mariner Hybrid offer a way to “drive green” and save gas without giving up interior space and versatility, says a representative of a local dealership.

“The Mariner and Escape hybrids have all the advantages people expect of SUVs — a high driving position, excellent outward visibility, plenty of cargo room — but their fuel economy is better than you get with many smaller vehicles,” said Barry Almonrode, sales consultant at Bill McCoy Ford Lincoln Mercury of Muncie.

While most cars achieve their best gas mileage on the highway, the Escape and Mariner hybrids get their best economy in the city, so they are most beneficial to those who run many errands in town or commute in traffic, he said.

“Even if you drive a small car, your fuel economy can drop to the low 20s if most of your trips are in stop-and-go conditions,” Almonrode explained. “In comparison, the Mariner and Escape hybrids are rated at 34 miles per gallon in the city.”

While Ford’s hybrid SUVs include several technologies not used on conventional vehicles, such as two-mode, gas/electric powertrains and regenerative brakes, these hybrid functions are controlled automatically, so there’s nothing special the driver needs to do, the company says.

“Orchestrating many of the functions is the job of the Vehicle System Controller,” Ford says on its Web site. “Among other things, it shuts the engine down during coasting and at stoplights to save fuel, converts the electric motor to a generator during braking to help recharge the battery pack, and helps manage powertrain-related functions.”

To test the ability of its hybrid SUVs to save gas and perform reliably under severe conditions, Ford has supplied Escape Hybrids to several New York City taxicab operators.

“With hundreds of thousands of miles accumulated over the past two years in New York City, there has been an estimated fuel savings of $250,000 for the initial fleet of 18 Escape Hybrid taxis,” the company said in a news release. “Now there are 288 Escape Hybrids in taxi service throughout the city, and drivers are reporting that the hybrids are delivering on the durability requirements and fuel-saving advantages that make them a great choice for taxi use.”

The Mariner and Escape hybrids both have 153-horsepower, 2.5-liter four-cylinder engines, 94-horsepower electric motors, 330-volt batteries and electronically controlled, continuously variable transmissions.

Other standard features include dual-zone automatic climate control, Sirius satellite radio and Ford’s “SYNC” system, which provides for hands-free control of the audio system and a Bluetooth-enabled cell phone.

Many people who buy an Escape Hybrid or Mariner Hybrid on or before September 30, 2009, will qualify for a $1,500 federal tax credit, according to the Environmental Protection Agency’s Web site (fueleconomy.gov.)

Because the tax credit is scheduled to phase out as manufacturers sell more of each hybrid model, the credit on the Escape and Mariner hybrids will drop to $750 on October 1, 2009, the agency reports.

SOURCE: Star Press

2010 Ford Fusion Hybrid Auto Tax Credit Evolves

By dancurranjr On May 30th, 2009

ford fusionThere has been a lot of confusion regarding the 2010 Ford Fusion Hybrid auto tax credit. Ford vehicles which use hybrid technologies including Ford Fusion, Escape, Mercury Milan, and Mercury Mariner all qualify for a $1,700 auto tax credit. The tax benefit will also depend on your individual tax circumstances.

The original government incentive was $7,500, which dropped down to $3,400 if you purchased the Fusion before April 1, 2009. Today the tax incentive is $1,700, but you may want to consult with your tax advisor or the IRS to confirm the amount of credit that you can claim. The auto credits are phasing out this year, but there might be additional IRS incentives in the future.

Here’s how the whole thing works today regarding these benefits and how much you really get back. If you make your purchase before October 1, 2009, you will receive a $1,700 tax credit. However, this is where the confusion begins.

If you purchase the Fusion before April 1, 2010, your tax credit will be $850. After that date, there are no auto tax credits from the IRS. Purchasing your Hybrid within the allotted timetable is key to qualify for the tax credit.

Some auto Web sites are still promoting a $7,500 tax credit. This is outdated information relating to a credit that already expired. Again, to maximum your full credit, you should talk directly with the IRS or your tax advisor.