Electric Vehicle Stimulus
The $787 billion bill succinctly referred to as HR1 is within a few hours of becoming the Economic Recovery and Reinvestment Act of 2009. It is some 1000-pages in length and includes a mind-boggling range of federal expenditures and tax credits.
Among those 1000-pages are programs tailored to foster a shift to a less petroleum-dependent transportation system. Besides $4.5 billion to be used to modernize the U..S. electric power grid, including $100 million in worker training, there are appropriations and credits for electric-drive vehicles, and the infrastructure to manufacture them.
There is $300 million to replace aging, in-efficient federal fleet vehicles with conventional hybrids, electric and commercially available plug-in hybrids.
Significantly, $2 billion is allocated to support the manufacture of advanced electric traction batteries for these vehicles. $10 million is reserved for administrative expenses for the "Advanced Technology Vehicles Manufacturing Loan Program."
In a much-needed shift in spending priorities, $27.5 billion is to be used to improve America's passenger and rail freight system, as well as its ports. Of that sum, $8 billion is to be dedicated to the development of intercity high-speed rail, which is, of course, electric-powered.
Under the amended tax provisions of the plan, each manufacturer of electric-drive vehicles and components will be entitled to various tax breaks. Consumers who buy qualifying plug-in vehicles will also be entitled to a maximum tax credit of $5,000 depending on the size of the battery pack as measured in kilowatt hours. Once each OEM sells 200,000 qualifying vehicles for use in the United States, the credits will begin to phase out.
Low-speed, neighborhood vehicles, as well as two and three-wheeled electric vehicles are entitled to a maximum $2,500 tax credit as long as the battery pack is at least 2.5 kWh. The capacity of the traction battery is measured from 100% state-of-charge to zero SOC.
Additionally, the bill recognizes the significance of plug-in hybrid conversions and allows a federal tax credit of 10% as long as the total cost of the conversion does not exceed $40,000.
While not everyone -- Republicans in particular -- are pleased with the stimulus bill, the electric vehicle, renewable energy and grid modernization provisions represent an important redirection in the future of surface transportation, one that will be increasingly powered by nationally-generated electricity, instead of imported petroleum.
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