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Tax Credits for Plug-In Hybrids?
Washington's growing interest could help make plug-in hybrids
more affordable. The payoff: 150 miles per gallon.
Bush plugs in: Outside the White House, President
Bush listens as David Vieau, CEO of A123 Systems, describes the
features of a plug-in hybrid, which is powered by either an electric
motor or a gasoline engine. This converted Toyota Prius includes a
battery pack made by A123 that extends the amount of time the car
can run on electricity, saving gasoline. The pack fits into the
car’s spare-tire compartment and can be recharged by being plugged
into an outlet. The extension cord is attached to the vehicle’s rear
bumper (bottom left).
Plug-in hybrid vehicles, which can be recharged
using a standard wall outlet, are becoming increasingly practical
because of advances in battery technology. And now the technology is
also gaining support in Washington, with the promise that it could
soon receive the type of federal tax incentives that have helped
fuel the sales of conventional hybrid vehicles over the past several
years.
Like conventional hybrid vehicles, plug-in
hybrids can run on gasoline and electricity. But plug-in hybrids
have bigger battery packs that can be easily recharged. As a result,
they can run longer on electric power, saving much more gas than an
ordinary hybrid can. Depending on the configuration of the vehicle,
people who drive less than 40 miles a day could use no gasoline at
all, while the average U.S. driver could see fuel economy of 150
miles per gallon. Although the vehicles consume electricity, the
power will come at a fraction of the cost of gasoline, and it
promises to reduce greenhouse-gas emissions.
Although no major automaker currently sells a plug-in hybrid, a
handful of companies provide aftermarket conversion kits. Indeed, at
the White House last Friday, President Bush viewed one example of a
Toyota Prius, a conventional hybrid car, that had been converted
into a plug-in hybrid using a battery pack that fits in the car's
spare-tire compartment.
President Bush called the plug-in hybrid and an all-electric-powered
pickup "living proof" that his ambitious goal of reducing gasoline
consumption by 20 percent in 10 years is possible. He also renewed
his request for research money for alternative energies. The
administration's proposed fiscal-year 2008 budget, which was
released February 5, includes $41.8 million for battery- and
energy-storage research and development.
Interest in plug-in cars extends to Congress. In January, a bill was
proposed in the Senate that would provide an up to $4,200 tax credit
to offset the expense of plug-in hybrids, which can cost about
$10,000 more than a conventional hybrid.
At the White House event, David Vieau, CEO of A123 Systems, a
startup based in Watertown, MA, whose batteries are used in the
plug-in hybrid, proposed to President Bush that the government offer
$2 to $3 billion in tax incentives over the next seven years and
provide $300 to $400 million in research dollars over the next few
years. Such incentives, Vieau said, could help plug-in hybrid
conversions grow from a few hundred now to thousands later, starting
in as soon as 12 months.
Deron Lovaas, who heads the vehicle campaign at the National
Resources Defense Council, says that several such tax-incentive
bills will likely be submitted this year. "There are sure to be
others, because there's a lot of enthusiasm about this in D.C. right
now," he says.
Lovaas says that tax credits could have a significant impact on
plug-in hybrid sales. He cites the success of tax credits for
conventional hybrids, whose sales have doubled every year since
2001.
Automakers have recently expressed increased interest in developing
plug-in hybrids. Late last year, General Motors (GM) announced an
upcoming plug-in version of its Saturn Vue. A123 Systems announced
an agreement with GM to help develop a prototype battery pack for
the Vue. The packs are scheduled to be ready for testing in vehicles
by the end of the year. In January, GM also revealed its Volt
concept car. The vehicle takes plug-in hybrids a step further by
using an all-electric drive train. The battery pack can be recharged
by an onboard gas-powered generator or by plugging it into the wall.
A study released last week suggests that over time, plug-in hybrids
could cut overall vehicle emissions of carbon dioxide in half, while
saving owners about $450 a year in fuel costs. According to a press
release announcing the study, which was done by the National
Renewable Energy Laboratory, in Golden, CO, and the utility company
Xcel Energy, based in Minneapolis, although plug-in hybrids would
draw power from the electricity grid, they would not necessarily
increase the need for electrical infrastructure. That's because they
could be recharged at night when much of the capacity of power
plants isn't being used. Another study, by the Pacific Northwest
National Laboratory, also suggests that plug-in hybrids could be
charged using existing power plants, at least in most of the
country. (See "How Plug-In Hybrids Will Save the Grid.")
March 01, 2007 - By Kevin Bullis |
