Tucked away in the supplemental add-ons to last week's now near-trillion dollar Wall Street-bailout bill is very good news for anyone planning to buy an electric vehicle or plug-in hybrid. Formally known as the Energy Improvement and Extension Act of 2008 (EIEA 2008), it provides that from now until 2014 purchasing either type of these clean, green new-era machines will net owners up to $7500 in federal tax credits. The exact figure will depend on the amount of energy stored in the car's battery pack, which must be able to provide at least four kilowatt-hours (kWh) to qualify at all. At that level, the payoff is $2500, with an extra $417 for each additional unit up to 16 kWh, or $7500.
Currently, only the Tesla Roadster qualifies for this advantage, but the Chevrolet Volt also will come in for the full $7500 break as soon as it launches. Intended to kick start the fledgling electric vehicle industry, these credits are designed to start phasing out when sales exceeded 250,000 units in a period that starts January 1, 2009. Larger commercial EVs also would be eligible for similar tax breaks, ranging from $10,000-$15,000 in value, depending on their size.
The EIEA 2008 legislation also extends and expands major incentives aimed at commercial manufacturers of various forms of renewable energy, including cellulosic ethanol and biodiesel as well as creates provisions to encourage the accelerated development of wind, solar and hydroelectric stationary power. Finally, the legislation calls on the Secretary of the Treasury to commission the National Academy of Science to undertake a study of the tax codes in an effort to determine the types and specific provisions likely to have the greatest impact on reducing carbon dioxide and other greenhouse-gas emission levels.