The economic stimulus package provides tax credits for 25-mph-max neighborhood electric vehicles, and plug-in hybrid cars that won’t be on the market for at least two years—but today’s hybrids get nothing.
A neighborhood electric vehicle from Global Electric Motors (GEM).
The 7 billion economic stimulus package signed into law today by President Obama may well be “an investment in the future,” but it contains relatively little to benefit today’s new-car buyers or to provide immediate economic stimulation. The American Recovery and Reinvestment Act of 2009 (pdf) sets the stage for the dawning of plug-in vehicles, but if you’re looking for help in buying a hybrid or conventional car this year, you didn’t get a lot.
Existing tax credits for purchase of hybrid vehicles remain unchanged. Toyota and Honda hybrids no longer qualify, and Ford hybrids will reach the sales cap and begin fading out sometime this spring, though the Nissan Altima Hybrid (only sold in eight states) and various hybrid models from General Motors will qualify for some time yet. The new law does not extend these existing hybrid credits.
The most immediate impact on green cars is the new tax credit for buying low-speed neighborhood electric vehicles (NEVs), electric motorcycles, and three-wheeled vehicles. Buyers of NEVs—small cars that cannot legally travel faster than 25 miles per hour—now qualify for a tax credit of up to ,500. This provision has been criticized as pork for “golf carts.” There are a handful of other expensive and low-production plug-in cars, such as the Tesla Roadster, that also qualify.
Spurring Auto Sales
The 2009 auto market will be the worst in decades, but the economic stimulus does little to stimulate new car sales.
The stimulus bill does contain a provision to make buying a car a little cheaper: It allows new-car buyers to deduct the state and local sales tax paid on a new car from their federal taxes, even if they don’t itemize. The provision applies to any vehicle purchased, from a hybrid to a Hummer, before the end of 2009. The total tax reduction based on this provision is worth perhaps a couple hundred dollars. “A positive development, but we don’t think it would have an immediate impact on the market,” said Chris Hanford, vice president at Hyundai’s US operations, in an interview with USA Today.
Recent Comments