Along With Wall Street Bailout, Plug-in Car Tax Credit is Passed: Chevy Volt Now $7500 Less
GM and the Chevy Volt turned up three “7s” on the Congressional slot machine. First, automakers got the $25 billion in low interest government loans. Second, the Wall Street bailout will likely help the beleaguered auto industry. Third, plug-in tax credits have now been signed into law.
The now passed by the House and signed by Bush $700 Billion Wall Street bailout bill had a few congressional “sweeteners” in it to help get it passed after failing for the first time in the House earlier in the week.
Sweetest for future Volt buyers is what’s called the Transportation and Domestic Fuel Security Provision.
This provision provides a tax credit for buyers of plug-in electric vehicles. It provides a base of $2500 plus an additional $417 per kwh for batteries greater than 4 kwh. For the Chevy Volt, that works out to $7500 per car, a number GM had lobbied for.
The credit will be applied to the first 250,000 plug-in cars sold in the US and will be phased out to 50% for the following two quarters, and 25% for the two quarters after that before ending. The total cost of the credits will be $758 million.
OK maybe its all money Uncle Sam really doesn’t have, but the odds look better now for GM and the Volt to thrive. And your Volt just got significantly cheaper.
Long live the USA, GM, and the Chevy Volt.
See Section 30 D. of the Bill
Popularity: 3%
Related posts:
- One Step Towards a Cheaper Volt: Senate Passes Plug-in Tax Credit
- Paulson Says Auto Industry Aid Should Not Come From Wall Street Bailout, Congressional Democrats Disagree
- GM CEO Misquoted About Chevy Volt Price and Timing, Want it For Less?, Get Tax Credits Passed
- Wall Street Journal Opinion - Chevy Volt Just a Political Tool
- House Passes Energy Bill: Would Take Money from Big Oil to Give Plug-in Car Tax Credits
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October 3rd, 2008 at 12:55 pm
For non-Americans, what does “tax credit” mean exactly? Do you have to pay 7500 less, or how does it work?
October 3rd, 2008 at 12:56 pm
Not bad at all. I’d rather have my money go into my car and not Wall Street.
October 3rd, 2008 at 12:56 pm
Well that should change the game a little.
Take Care
Arch
October 3rd, 2008 at 1:06 pm
I guess I’m a little fuzzy about exactly how tax credits work.
As an example, let’s say I buy a Volt in October of 2010.
I file my taxes for 2010 having paid in $5400 in Federal Income tax. My tax was actually $5100, so I was looking for a $300 refund. This is all before applying the tax credit.
How much do I actually get back from the IRS? Do I get it all in 2011 along with the rest of my tax refund?
Sorry for putting this so simply; I guess I am a simple guy.
October 3rd, 2008 at 1:07 pm
That is terrific however, what if I can’t get one right away…..then do those of us who want one get screwed because of the phase out?
Either the government wants us to switch over or it doesn’t…..I won’t buy one if I can’t get the $7500 credit, especially in light of the fact my neighbor might but I won’t just because GM runs out or doesn’t have it available in Michigan…that would be totally unacceptable to me.
October 3rd, 2008 at 1:08 pm
“Chevy Volt Now $7500 Less”
I’m afraid that’s not the case. The dealers will mark the price up with diddly-boom dealer installed options (floor mats, mudguards, undercoat, paint protection…) to make up the difference. That’s what happened with the Prius when the tax credit was still available. Now that gas prices have gone up, they’re doing more of it.
A tax credit counts directly against your taxes. A tax deduction reduces your adjusted gross income, for tax purposes.
October 3rd, 2008 at 1:11 pm
I agree Grant. Let’s also go further and get rid of the federal income tax which we could almost do if we roll back the federal budget to Y2K budget…and with a little more trimming we could definitely get rid of it. Heck, if you get rid of the corrupt IRS and the Federal Reserve (which has limited Federal oversight and questionable reserves) then this union would be so much more prosperous and we wouldn’t need any stinking tax credits which makes us feel like $2 hookers.
October 3rd, 2008 at 1:12 pm
That is great, as long as the Volt isn’t going up $7500
NPNS =D-
October 3rd, 2008 at 1:14 pm
# 4
Jack Riggins
If you do not run into the Alternate minimum Tax tables you would get $300 + $7500
October 3rd, 2008 at 1:16 pm
I’m actually quite excited about that. Looks like it really will be a $30,000 car! This credit really throws off the balance between “this car is worth it” or not, in the favor of it being worth it of course.
So I pay $30,000. I keep the Volt for 10 years (which isn’t that long, only until the WARRANTY expires, if all goes well i’ll keep it 15 or 20 years, with a 20-25 mile EV range still). Compared to the 25 MPG, 15,000 mile a year car i have now, with gas at $3.75 (kind of low right now!) i’ll be saving $2250 a year in gas. Assuming gas prices DON’T EVEN GO UP, 10 years of gas savings will equal $22,500! So you’re still $8500 in the hole, but how much is your Volt going to be worth in 10 years? Still has probably half of its original electric range, and still gets 50 MPG after that, i honestly think a 10 year Volt’s resale value would be right around $8500!
Which would net you a Grand Total 10 year cost of ownership to ONLY the cost of car insurance, if you take into account the gas savings.
October 3rd, 2008 at 1:18 pm
Lyle wrote: “Chevy Volt Now $7500 Less”…
That’s misleading…. we all know how this works…. GM will charge more for the Volt than they would have otherwise so the consumer won’t see a price $7,500 less than they would have otherwise.
I haven’t seen the language of the tax credit, but it sounds like GM is being rewarded for having a larger “raw” kwh pack rating… even though they only use 50% of the packs capacity. So if another vehicle used EnerDel’s packs where they use 95% of the packs capacity, they are penalized with a smaller tax credit.
In addition basing the credit on the size of the battery pack (raw or usable) rewards automakers for building bigger and heavier hybrids even if they get relatively poor fuel or energy (in case of plugins) economy.
The tax credit should have, for plug-ins, based on it’s battery only range (for the Volt 40 miles). In any case, this bailout package was so full of pork, never mind the huge cost of the financial system bailout itself, that this tax credit is just small fries in comparison, and I’d still prefer to see any tax credit promoting EV’s than to bail out wall street which would have worked itself out (look at the competing private industry bid for Wacovia as to how free markets should work).
October 3rd, 2008 at 1:20 pm
GM List price w/o tax credit: $41,999.00
GM List price with tax credit: $49,499 .00
Your price: $41,999.00
Owning a Volt, priceless…well almost
October 3rd, 2008 at 1:22 pm
It’s a step in the right direction. Will our waiting list be honored though.
October 3rd, 2008 at 1:22 pm
Like i said Getting closer to 30K everyday!! Even at 35K this car is still a game changer.
Now bring out all the “credit’s gonna get eaten up by GM & the dealer” Guys. This should be fun!
If they price the Volt @ 35-37K it will be the most popular, revolutionary car since the model T!!
PS the bailout sucks, but at least now i’m eating from the pig troff too!
October 3rd, 2008 at 1:27 pm
#6 Bob
I’m afraid ANY car manufacturer’s HQ will tell you (and with a straight face, too) that its dealers are free to set the price of the vehicles they sell: something having to do with the “law of supply and demand.”
Look, some car dealers are unscrupulous, while others are not. When I purchased my Prius in January 2006, I certainly paid sticker, but not a penny more.
October 3rd, 2008 at 1:29 pm
If GM gets to market the fustest with the mostest, they get to pocket the $7,500 by selling higher - the buyer gets his inflated price rebated.
If there are other players, the market may hold the prices down providing there is ample supply of electric vehicles to choose from. Then the tax credit will really do something for the purchaser.
This is a stimulus that is entirely unneeded to encourage a market. It is a big boon to GM if they can sell their whole production close to half a billion.
October 3rd, 2008 at 1:32 pm
Don’t worry, everybody, GM will NOT be pumping the price up. They can’t. First off, they would be quickly accused of violating the whole point of both the tax credit and the acts to boost alternate transport, that is, to get as many of these vehicles on the road as soon as possible (didn’t anyone notice the unusually high numbers of vehicles involved? WAY more then any of the original hybrids!). As well, they are depending on future Volt generations to save the company, and that won’t happen unless they can get the first non-profitable generation out the door for real world testing and improvements fast, just like the older computers.
The Volt will actually be quite competitive in my area, NC where a Prius is running about 28,000, and can not do gas-free driving at all.
October 3rd, 2008 at 1:33 pm
I’m against the bailout bill, but I feel better about it due to the fact it was loaded with alternative energy legislation that was having a difficult time passing.
Oh by the way, I’m still waiting for the (2) economic stimulus packages to start working????????
too bad we didn’t use that money towards alternatives and reduce our (oil) funding that we send directly to terroists.
October 3rd, 2008 at 1:34 pm
I itemize my taxes so I wonder if that is applied against my deduction.
October 3rd, 2008 at 1:36 pm
I love it, GM is giving cars away to keep numbers up, their overall sales numbers are some of the lowest ever, as Statik pointed out their losing money on cars with all the rebates, but……….
#6 Bob
#11 Jeff M
#12 JEC
All think GM is going to mark this car up $7500! Wow i wish i had as much insight into the workings of GM as they do.
JEC thinks the Volt will cost 49K, are you serious?
Here’s what Rick Wagner has to say about the price of the Volt 2 Months ago:
http://www.charlierose.com/shows/2008/08/18/1/part-one-of-a-look-at-gm-with-ceo-rick-wagoner
Fast forward to 32:15 to hear his take.
“It won’t be 50, i’d say mid to high 30’s” was his quote exactly!
October 3rd, 2008 at 1:41 pm
The news is good. Many of us will want to be in on the cutting edge of a new technology like we were when we bought our first computer. The first production run of Volts will probably not be bargains — but I will pay extra to not to have to wait a few years for prices to decline as the technology matures. The $7,500 just makes it a little more feasible.
October 3rd, 2008 at 1:42 pm
To quote a character in Anchorman: “That’s GOOD NEWS!”
The Volt will unquestionably sell well now, launching the type of product that will segue us off foreign oil and into alternative fuels.
This whole package should be a great shot in the arm to the economy, and a sobering thought to Dems, who thought they could add more entitlement programs to the federal budget.
The next administration should do nothing but focus on advancing water, food, shelter, energy and transportation policies for the nation as a whole. Each state should be looking at how to become energy independent from all other states (I’m talking to you, Florida.).
October 3rd, 2008 at 1:48 pm
Bad News: The price just went up
Good News: There will be more Volts produced
On balance it’s a great first step. Hopefully it will help move along the electrification of transportation. We are definitely NOT going to see 10K the first year. No way. GM’s issue was how to sell cars it might be losing money on. This will no longer be the case.
October 3rd, 2008 at 1:50 pm
http://www.ecogeek.org/content/view/2176/69/
Take Care
Arch
October 3rd, 2008 at 1:51 pm
Tells me a couple of things. One of them is even in a financial crisis Congress can’t manage to focus on the main issue. Isn’t there a difference between compromise and “Let’s make a deal” ?
Since the car is still 2 years away, MAYBE it will be a $7500.00 rebate. Things have another two years to change.
This increases the odds that I might decide to buy one, but I still don’t know the bottom line. Encouraging news, I guess. Why isn’t it part of an energy bill though?
October 3rd, 2008 at 1:53 pm
The biggest problem with the bailout bill is that it doesn’t hurt the shareholder equity. This creates moral hazard. Shareholders will still encourage risky behavior because they get the profits, and the public takes the loss. If the shareholders were to take a hit, they would encourage a bit more caution in the executive suite.
Warren Buffett pointed the way with his investment in Goldman Sachs, but nobody really paid attention.
When all our dollars turn into not-very-good toilet paper, we’ll at least have our electric cars. No, wait, the batteries are made in (China? Korea? Japan? Germany?)
October 3rd, 2008 at 1:53 pm
[...] Souce: GM-Volt [...]
October 3rd, 2008 at 1:55 pm
Steve,
As Bernacke will tell you, the Great Depression was the result of the unavailability of capital / credit. These steps will keep loans flowing to those who qualify, which will in turn help autos and homes to sell, which will revitalize our economy.
The bonus are the tax breaks for hybrids and renewable energy providers, which will help keep capital / credit in the US, maintaining our economy, and not the economies of Russia, Iran, Venezuela and other hostile nations.
October 3rd, 2008 at 1:56 pm
I’m thinking of buying an electrical motocycle/scooter… too bad this bill doesn’t cover any tax break for that.
October 3rd, 2008 at 1:57 pm
I would bet that GM will now price the Volt at around 45K which makes our sales price about 37.5K. What GM SHOULD do is sell it for 37.5K and let us buy for 30K.
Uncle Sam has no money. This will be another trillion added to the federal deficit causing inflation (of the money supply since the Fed creates money out of thin air) and the value of our dollar bill to drop. This bill really sucks.
October 3rd, 2008 at 1:57 pm
If it’s for plug-in electric vehicles, not just plug-in hybrids, it means you could get Tesla’s 2010 high-end all-electric luxury sedan for $52k or so. That could make it pretty popular.
October 3rd, 2008 at 2:02 pm
#20 JonP Says: “It won’t be 50, i’d say mid to high 30’s” was his quote exactly!
————————————————————————————-
Yes!
For all the people who suspect that GM will now raise prices way over $40K, I have a different theory.
I think GM wanted the final price of the Volt to be $30K all along, but they wanted at big tax credit from congress, so they started taking about numbers up to $40K or more. Then when the politicians started talking $5K-$7K tax credits, GM’s CEO started saying mid-to-high $30’s. Now that the tax credit is finalized at $7.5K, I’ll bet GM sets the Volt sticker price at $37,499, or $29,999 after the tax credit.
In addition, my bet is that GM will take steps to discourage initial price gouging by dealers. They want the Volt launch to be a BIG DEAL, so they don’t want any bad press from dealer price gouging.
But as always, my theory could be wrong. We can only hope…
October 3rd, 2008 at 2:07 pm
#25 Steve: “Why isn’t it part of an energy bill though?”
As it turns out the Constitution says any revenue bills (aka tax) must start in the House. So, from what I see, the Senate actually added the bailout stuff to the renewable energy tax incentives bill (which they already got from the House) so they could vote on that instead of waiting for the House to try again to send something new…
October 3rd, 2008 at 2:07 pm
They will probably change the deal so you have to lease them. Then when your lease is up, they will take it away from you and crush it. Sound familiar?
October 3rd, 2008 at 2:09 pm
I find the 4th paragraph of this article disturbing….
Essentially, only the first 437,500 Volt buyers will get the tax credit; this is a maximum number.
The 437,501st buyer & all subsequent buyers after that will not get the tax credit.
This is assuming, of course, that the tax credits would not be renewed upon their expiration.
With the $25 billion the Big 3 has gotten, with the plug in tax credits, we as the consumer had better not see any kind of backsliding when it comes to dedication of the automakers to build serial plug-in hybrids.
-Don’t tell us you can’t afford to build them, we just gave you $25 billion.
-Don’t tell us that no one will want them, because that is patently false & we’ve passed tax credits for them.
October 3rd, 2008 at 2:10 pm
Will this influence the Volt battery decision? Larger credit may make the more expensive (and better) A123 battery more viable.
October 3rd, 2008 at 2:10 pm
#32 Dave G
Finally someone that sees this as more than an opportunity for GM to make money. This is the tip of the iceberg, they want to license this tech out to other makers, hard to do if your only selling 25k a year….
There gonna sell this thing for 30K after rebates and sell as many as they can.
As far as discouraging dealer markups your right on, they want to sell a lot of these cars, i wouldn’t be surprised to see a higher “dealer holdback” if dealers agree to sell it right at or $500.00 above invoice!
October 3rd, 2008 at 2:11 pm
Breakeven cost on the Volt is $40k.
Not sure why anyone would expect GM to sell it for less.
GM has been quoted as saying they will not take a loss on this car…
October 3rd, 2008 at 2:16 pm
When I purchased a Prius, it was under the same type of tax credit. I was supposed to get $3300. However, due to other deductions I had already taken, I was only able to get $800 of the credit. I think this is very misleading on the part of the government. If you say $3300, you should get $3300.
So be a little suspicious of the $7500 tax credit.
Regarding the price of the Volt, since the price has not been announced yet, you can be sure GM is thinking of a higher number now.
When the tax credits were available for the Prius, people were attracted to buying it. As a result, discounting was reduced, and I had to pay “full sticker” price to get the car at all. So the tax credits effectively increased the price of the car by reducing the need for discounts. As a result, the consumer does not get all of the rebate, part of it goes to the manufacturer/dealer in the form of higher sales price.
Supply and Demand.
October 3rd, 2008 at 2:16 pm
#38 Gas Electric
Actually i asked bob lutz directly if they were willing to take a loss on the inital Volts like Toyota did on the prius, and he said yes.
Don’t make me link to the Volt nation video……
October 3rd, 2008 at 2:16 pm
But remember that if you are hit by the Alternative Minimum Tax, you are not eligible to take tax credits and that a tax credit only applies against tax that you owe. If you don’t owe $7500, you will not be able to use the entire credit.
October 3rd, 2008 at 2:17 pm
I’m not a huge fan of the tax credit, but the credit will help sway on-the-fence buyers that will drive up demand that will bring economies of scale that will bring lower prices……..that will lead to the eventual phase out of the credit. The good thing - it will advance the technology and the acceptance which is what I believe is the main goal of the Govt (use less oil!!!). This was successful with Solar tax credits in CA and NJ.
October 3rd, 2008 at 2:18 pm
Don’t know about how good of news this is for the consumer. This is good news for the manufacturers and great news for the dealers. They will be now adding extra profit to the car. It was unfortunate that they passed this BEFORE GM announced pricing. Without any serious competition for the Volt in 2010/11 they can charge a lot for the folks here that are crying NPNS! No matter how we slice it, I suspect that this vehicle will cost us $40k.
October 3rd, 2008 at 2:21 pm
I’m partucularly happy about the provision encouraging higher Kilo-wattage. Great motivation to make SUVs and trucks having large battery capacity!
This may be the turning point in oil consumption!
October 3rd, 2008 at 2:30 pm
In Canada, we may get “Green Shift” tax credits if the Liberals win the election on Oct. 14. or not have to pay as much of their proposed cabon tax. While they have not proposed a new tax on gasoline, I would expect to see less fuel-efficient vehicles subject to a new tax. The Conservative’s proposed one cent reduction in the tax on diesel fuel is something most consumers will never see and is just another gift to the oil companies because they raise and lower their prices by more than this on any given day.
October 3rd, 2008 at 2:38 pm
Although the tax credit is good news here is my experience regarding the $3,000 tax credit I received when buying (originally my Honda Insight)
1) All dealers gleefully announced the tax credit, but when pressed how to obtain it the credit, the dealer was at a loss as to how to proceed.
2) The tax credit is actually given off your FUTURE taxes, so you still have to pay (generally) the full price of the vehicle at the Dealership
3) The IRS has not made it generally known how to CORRECTLY obtain the tax credit. In my case, in order to obtain the tax credit (at all) you would have to know what line item to place the $3,000 credit (at that time it was line item 32), you HAD to write “CLEAN FUEL” above that line with the “-3,000″ amount.
***If you failed to perform all three tasks on the correct line you DID NOT GET THE CREDIT!**
So, bottom line, let’s see how difficult the IRS makes it to actually get the $7,500 credit.
October 3rd, 2008 at 2:41 pm
Remember also that some other OEMs are coming out with plug-in hybrids and some all electric cars in the next few years.
October 3rd, 2008 at 2:42 pm
The problem is the dealers and GM are going to see these as an excuse to gouge the average Joe. They’ll say it’s an excuse to price the Volt at $49,999. If you don’t receive the credit at the end of the day (year), it’ll be YOUR FAULT for failing to read the fine print.
This is not very reassuring…
October 3rd, 2008 at 2:42 pm
#38 Gas Electric Volt Says: “Break even cost on the Volt is $40k… GM has been quoted as saying they will not take a loss on this car…”
————————————————————————————-
GM has also said many other things as well. For example, GM said:
• the Volt will be priced in the mid-to-high 30’s.
• they figured 2 batteries into the initial cost of the Volt.
• there were already over a dozen cost improvements in the 2012 model year.
• they would produce 10,000 Volts in the first year, and then quickly ramp up after that.
So let’s say the 2011 model battery really does wear out after 5 years and they have to replace most of them. If they price the Volt at $37.5K, then they would lose $2.5K for maybe around 8000 vehicles. That would work out to a $20 million loss, which is not a lot. As a comparison, that’s less than 2% of what they’ve spent on Volt development already, and probably less than 1% of the total Volt development by 2010.
The point is that GM can handle a small loss for the 2011 model year (which starts selling in Nov. 2010), as long as the 2012 model year is cost parity or profitable.
October 3rd, 2008 at 2:46 pm
This is great!
Though this will also mean GM can charge more for it so people can still aford it. So, the $7500 does not just go into the car buyers’ pockets!! In other words, if there was no tax incentive, GM would need to charge less in order to be able to sell the car.
Would have been better if this was announced _after_ GM put a definite price tag on the car…
October 3rd, 2008 at 2:53 pm
#4 Jack Riggins Says: “I file my taxes for 2010 having paid in $5400 in Federal Income tax. My tax was actually $5100, so I was looking for a $300 refund. This is all before applying the tax credit.”
————————————————————————————–
Unfortunately, if your 1040 Tax Due line is only $5100, then I would say you probably can’t afford the Volt anyway. But if you did buy it, I assume you would get a $5400 refund, which means you don’t get the full credit.
October 3rd, 2008 at 2:54 pm
# 32 Daveg
I’m thinking along the same lines as you. GM Threw out several figures from 30’s to over 40 and sat back to listen to the chatter on forums like this to gauge what people will pay.
Now knowing what the credit will be before they’ve announced the price, they can set the MSRP to be what people have been saying the most they will pay in forums like these!
It will be, in my opinion, a ‘tail wagging the dog’ situation.
Kind of like mentioning you have a coupon before you get the bill at some service centers. Don’t kid yourself, you are not getting a discount, other prices are adjusted up accordingly.
October 3rd, 2008 at 3:04 pm
I need relief from all this financial talk: can someone Photoshop the finalized Volt design in a range of colors OTHER than metallic green?
October 3rd, 2008 at 3:14 pm
The real question is, $7,500 less that What!
October 3rd, 2008 at 3:17 pm
Johann (#7):
(and anyone else who despises the current US income tax):
http://www.fairtax.org
October 3rd, 2008 at 3:17 pm
Guys anyone making over 50K, paid in 7500K to the feds in federal tax at least. Unless ypur claiming multiple dependants(like more than 4). So you’ll be able to take advantage of the credit.
Not to mention if your making under 50K, or under 80K and have 4 dependants you shouldn’t buy a Volt anyway. In my opinion that would be living way above your head.
October 3rd, 2008 at 3:17 pm
#20 JonP
Here’s what Rick Wagner has to say about the price of the Volt 2 Months ago:
“It won’t be 50, i’d say mid to high 30’s” was his quote exactly!
JEC thinks the Volt will cost 49K, are you serious?
=======================================
Ok, lets say Ricky is actually correct, which I am not so confident about, but lets say for sake of argument he is. Then would this make you a little happier?
The point is GM has been figuring in the tax credit from the beginning. NEVER ONCE has anyone, including Lutz or Wagner been willing to say their price did not include GM’s hoped for tax credit.
GM List price w/o tax credit: $34,499.00
GM List price with tax credit: $41,999 .00
Your price: $34,499.00
Owning a Volt, priceless…well almost
October 3rd, 2008 at 3:21 pm
One way it would work really well is, having the ability to assign your $7,500 credit to either the dealer or to GM making it an immediate deduction to the price you pay at the dealer.
Many companies did that in the late 70’s when there was a solar credit. Many companies selling or leasing solar water heaters took the solar credit themselves and passed the savings along in lower prices to the consumer.
Now That would Work!!
October 3rd, 2008 at 3:24 pm
LYLE,
Now that we know what the tax credit is going to be I think it’s time for a new Poll.
How about this.
Considering That we now know that the Tax Credit will be $7500 for the Volt. Plus all we know about fuel/maintenance cost over the life of the car. What is the absolute most you will/can pay for a Volt before the Tax Credit?
A. Less than 25K
B. 25K - 30K
C. 30K - 35K
D. 35K - 40K
E. 40K -45K
F. More than 45K
October 3rd, 2008 at 3:24 pm
$758 million.
This may sound like a lot of money until the “big picture” is seen:
$137,500,000 (cost of one F-22 Raptor fighter aircraft)
$758,000,000 (cost of plug-in tax credit)
$12,000,000,000 (cost of 1 air craft carrier battle group)
$474,000,000,000 (cost of Iraq War to 12/07)
$13,750,000,000,000 (U.S. 2007 GDP)
Fact: If we weren’t tied to Middle Eastern oil supplies we could retire one of our carrier battle groups.
Fact: This plug-in tax credit costs the same as 6 F-22 Raptor Aircraft.
Fact: If we weren’t tied to Middle Eastern oil, we would not have invaded Iraq.
Fact: This plug-in tax credit will help $billions stay in the U.S. economy, as opposed to leaving our economy for nations that do not have our best interest at heart.
Fact: This tax credit is an investment that will pay for itself many times over.
Fact: The size of this tax credit will not allow the poor to afford a plug-in vehicle.
I can only hope our future president is more conceptual and able to see the big picture.
October 3rd, 2008 at 3:29 pm
EDIT…timed out
October 3rd, 2008 at 3:31 pm
I’m not afraid of being gouged by a dealer for a Volt, because I refuse to pay over sticker. I will gladly pay the MSRP, but not a penny over. I guarantee you if you’re patient enough, you’ll be able to find a dealer that will sell one for sticker. Maybe not in the first 1-3 months, but 6 months out, you’ll be able to find someone willing to work with you.
October 3rd, 2008 at 3:31 pm
I only hope that they can produce enough Volts so that we can all get one and claim the credit before others - Toyota, Nissan and Chrysler for a start - grab off too many of the first 250,000.
I heard in the announcement that the bill had been signed some comment that it also contained some relief from the AMT for “middle class families” Does anyone know if such will help with the issue, often raised here, that the AMT will gobble up all or part of the credit?
October 3rd, 2008 at 3:35 pm
#60 Drake:
Amen brother, preach on!
October 3rd, 2008 at 3:36 pm
With everyone now on line with an upturned hat (including the Governator), the US Treasury has introduced a new currency:
http://i36.tinypic.com/6f413d.jpg
October 3rd, 2008 at 3:40 pm
Terrific! I guess GM will be increasing the sticker price by $7,500. Gosh, I feel so much better.
October 3rd, 2008 at 3:41 pm
#60 Drake
How does wasted gov’t defense spending justify more wasted spending? Or is just our turn to feed at the public trough?
How does this “investment” help us get off oil? GM was going to produce the Volt before the credit and I haven’t heard they’ll actually increase production rates. So the credit looks to me like it’s just a shooting straight into corporate profit. It won’t truly affect our oil consumption levels.
I don’t want to move into politics with this but one of the presidential candidates suggested a battery competition like an X-Prize to advance battery tech. That makes better sense to me. This credit is just another corporate subsidy.
October 3rd, 2008 at 3:50 pm
Cautious Fan #67 - Good questions there. Let me see if I can address them all:
How does wasted gov’t defense spending justify more wasted spending? Or is just our turn to feed at the public trough?
-The point here is that if we did not have to rely on Middle Eastern oil for the success of our country, we would not have to spend so much on defending (obtaining?) that oil WITH expensive defense spending. Require less oil, spend less on security it. By the way, America has no shortage of electricity. The last time I checked, we have ample natural gas, uranium and wind here (not to mention that we are the “Saudi Arabia of coal”). Why not use our home-grown energy sources for transportation?
How does this “investment” help us get off oil? GM was going to produce the Volt before the credit and I haven’t heard they’ll actually increase production rates. So the credit looks to me like it’s just a shooting straight into corporate profit. It won’t truly affect our oil consumption levels.
-If there was no Volt tax credit, fewer units would be sold. It’s basic economics. Also, for every Volt on the road, that is that much less oil that we have to fight (and spend) to secure.
I don’t want to move into politics with this but one of the presidential candidates suggested a battery competition like an X-Prize to advance battery tech. That makes better sense to me. This credit is just another corporate subsidy.
-Politics are very closely tied to energy independence, thus it is very hard to avoid politics when discussing this issue which, in my opinion, is the most important issue of our time. Again, basic economics: the less plug-ins cost, the more of them will be purchased and the more of them will be made, and the more money will be reinvested back into the technology making future versions of the vehicles even better.
October 3rd, 2008 at 3:50 pm
#55 Jackson
I’m with you. When one party is in congress they get tax credits for their buddies. When the other party gets in the credits move to new companies. The answer isn’t new politicians. The answer is to take away the lever congress uses to play these games.
October 3rd, 2008 at 3:53 pm
I don’t think one thing has registered through to the masses here…and how this is different from the original piece. (+1 point to noel)
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‘‘(1) IN GENERAL.—There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable amount with respect to each new qualified plug-in electric drive motor vehicle placed in service by the taxpayer during the taxable year.
‘‘(B) PHASEOUT PERIOD.—For purposes of this subsection, the phaseout period is the period beginning with the second calendar quarter following the calendar quarter which includes the first date on which the total number of such new qualified plug-in electric drive motor vehicles sold for use in the United States after December
4 31, 2008, is at least 250,000.
—————————————————
.
.
.
.
.
Do you see it?
“qualified plug-in electric drive motor vehicles sold for use in the United States ” It no longer says, ‘per manufacturer’. GM got the $7,500 they lobbied for but lost the bigger battle.
This means your plug-in credits are going to be eaten up by the plug-in Prius first and then the Chrysler whatever as well…then the Volt.
How many Volts are going to be on the road versues the Plug-In Prius and whatever Chrysler puts out…or the iMiev?
10 to 1? Don’t count your rebate money just yet if you dont live in the ‘chosen states’ or take delivery by the end of 2011…it doesn’t look like its going to be there to me.
Maybe the first 20K Volts get this…maybe.
So GM didn’t get really get a 777 on their pull from the government…that got a free spin maybe.
October 3rd, 2008 at 3:53 pm
I like your post and your blog, thanks for keeping us updated, BUT
Anyone that thinks this lowers the price you are going to pay for a Volt is a FOOL. Its just like houses for the poor(wipes a tear from my eye). All this crap does is increase the price of the object. Sheeple believe in crap like this, learn to think for yourself and quit believing everything the MSM and the greedy talking heads tell you.
Between the billion dollar give away to the auto companies and this so called lower the volt price tag crap this car has been paid for by the taxpayers. But will we get what we paid for? Hell no, now we have to buy it again if we want it in our driveway. Now guess who is getting paid twice for the car? The worthless upper management that can’t run a company without taking the taxpayers money……TWICE.
October 3rd, 2008 at 3:54 pm
HURRY UP GM!! I am so ready for my Volt!
October 3rd, 2008 at 3:54 pm
35. Guy Incognito
only the first 437,500 Volt buyers will get the tax credit
49. Dave G
they (GM) would produce 10,000 Volts in the first year
63. noel park
Toyota, Nissan and Chrysler for a start - grab off too many of the first 250,000.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Let’s look at the bright side:
This isn’t all bad news… when the tax credit is used up…
1. congress (could) come up with a new tax credit plan.
2. batteries (could) become cleaper as the manufacturing ramps up.
3. we’ll have a half-a-million electric cars on the road.
October 3rd, 2008 at 3:54 pm
‘lecrcicty isn’t free. and it’s coal, at least here in the east.
has anybody figured cost of ownership,… or gas vs. electric?
October 3rd, 2008 at 3:55 pm
#5
Hopefully by the time the $7500 tax credit does start to phase out, GM will be ready to release the Volt 2.0 which should be considerably cheaper.
So those of us who don’t get a Volt right away, won’t be screwed; we’ll be able to buy the 2nd Generation Volt at a much lower price that won’t need a tax credit to put it under $35k. I’m sure GM has plans to work with.
October 3rd, 2008 at 3:55 pm
Seriously, how can so many not understand what a tax credit means????
This doesn’t mean that the cost of the car is 7500 bucks less.
its only that your taxable income is 7500 less.
Therefore if you normally pay 25% of income in taxes (Middle class), you will only be getting 25% of 7500 back in your pocket ($1875). The richer you are the higher the tax bracket you have and the more money you get back…
The title of this article is misleading and unprofessional.
October 3rd, 2008 at 3:55 pm
That Volt is going to look really nice parked next to my Tesla Roadster. Yeah Baby.
October 3rd, 2008 at 3:56 pm
#67 Cautious Fan
I think his point is if we spent more on supporting energy independence we could save alot on defense spending.
Example:
For what we spend in Iraq in 6 months the government could buy 1.5million Volts from GM @ 40K a piece. To me that would of been better than a loan, this way they get their operating capital (alot more than they got) and we get the Volt’s.
Now it would probably take GM 5-6 soild years to make them but with a infux of 60Billion i think they could get it done. Assuming after year 1 we get a soild 150K per year out of them.
The government could just give them away to low-income famalies, or have a lottery or whatever they come up with…….
Point is this. GM would of had to hire alot of new employees, the battery and all part suppliers would have to hire alot of new people. The economies of scale would of come down like lightning, the price of a barrell of crude would plummet due to specualtion of reduced demand, industries that are forced to rely on gas/diesel would see increased profits due to the drop in crude, etc…….
That’s how you get the economy fired up again. Not with buying 700 Billion in Crap dirivetives that are only going to lose value, while not even remotely addressing the root of the problem(housing forclosures).
October 3rd, 2008 at 3:57 pm
My carbon footprint is going down in 2010.
October 3rd, 2008 at 4:00 pm
Jeff M. # 11
“That’s misleading…. we all know how this works…. GM will charge more for the Volt than they would have otherwise so the consumer won’t see a price $7,500 less than they would have otherwise.”
*** *** ***
I think you’re right. And for the first 10K units in 2011, good luck. Demand will be so high and supply so low that those buying them probably won’t even care about the deduction.
October 3rd, 2008 at 4:02 pm
Thank you Sarah Palin. I know you spent many hours helping to get this legislation passed. And thank you JM for your tireless efforts.
October 3rd, 2008 at 4:02 pm
#74 Bill
“lecrcicty isn’t free. and it’s coal, at least here in the east.
has anybody figured cost of ownership,… or gas vs. electric?”
It kinda varies based on what you drive now, and how many miles per day you drive to & from work. Give me those numbers and i’ll give you a rough est. of how much you will save not including maintenance savings.
October 3rd, 2008 at 4:04 pm
#76 host Says: “Seriously, how can so many not understand what a tax credit means????
This doesn’t mean that the cost of the car is 7500 bucks less.
its only that your taxable income is 7500 less.”
————————————————————————————-
What you’re describing is a tax deduction, which is taken off your taxable income.
A tax credit is taken off the Tax Due line of your 1040. So if you normally get a refund, then your refund will be $7500 more.
October 3rd, 2008 at 4:05 pm
#81 Nobama: Great sacasm! Made me smile.
As for the rest, I’ll wait until I see the sticker price GM puts on it before crying foul.
October 3rd, 2008 at 4:07 pm
#78 JonP
Fair point. Drake’s point maybe wasn’t against wasteful defense spending, but how reduced consumption will decrease the need for it.
I still don’t see any benefits from this credit. If the Volt is so great, which I think it can be, it doesn’t need a subsidy. It makes economic sense on it’s own two feet, which is why GM started pursuing this before the gov’t jumped on the bandwagon. Will this subsidy actually create MORE jobs. Is GM going to increase their production rates as a result of the subsidy? I doubt it. I think you’re giving gov’t credit that smart engineers and workers deserve.
I don’t see how gov’t creates jobs here. They tax one group, move the money someplace else, and claim they’ve created something. If I had kept my money to begin with I guarantee it’d get spent more efficiently then after passing through the bowels of bureacracy.
October 3rd, 2008 at 4:07 pm
The whole idea is to get people out of the guzzlers and into the newer technology. The price of the Volt seems to be getting up there; and I guess GM is hoping the Volt will compete for the high end Beamer and Lexus crowds money.. Not!
Looks like the Volt isn’t going to be your average Joe Six-Pack’s family car and your gonna have to be making (or hopefully keep making) some serious coin to be able to afford one. The $7500 tax credit seems to perpetuate that notion with the big earners getting the best tax rebates because, as I understand it, that $7500 will come off their ‘marginal tax rate’…technically reducing the taxes of the well off, by ‘up to’ $7500.
In Canada the ‘green rebates’ are for everyone, and are not tied to the buyers taxes or tax burden… not a lot, but here the Feds give back a flat $2000 if you buy any ‘green’ fuel efficient car like the SmartCar or Prius. Presumably the Volt would qualify as well. That makes the SmartCar, for example, costing as little as $15,000cdn.
Enter the new Honda Insight, a completely revamped < $21,000 hybrid… a big difference from the cost of the Volt. Hypermilers were getting upwards of 150mpg out of the old Insights. That’s not real world driving, but 60 to 70mpg highway in the new 4 passenger Insight might well be.
GM, bring down the price of the Volt and make it affordable or the Asians will take the market.
October 3rd, 2008 at 4:08 pm
#76 Host says:
“Seriously, how can so many not understand what a tax credit means????
This doesn’t mean that the cost of the car is 7500 bucks less”
I’m not an accountant but i thought a “tax credit” was subtracted off of your total tax due at the end of the year.
Example:
Jon pays 15K to the feds throught the year out of his bi-weekly paycheck. He does his taxes at the end of the year and owes 12.5K, so he would usually get a 2500.00 check from the IRS in a “tax return check”. Since Jon bought a Volt he only owes 12.5K - 7.5K (credit for Volt) which is 4K. But he paid in 15K so he gets a check from the IRS for 11K as his tax return
Guys is this wrong??
October 3rd, 2008 at 4:10 pm
No Plug No Credit.
This could prove interesting. The first to market get the credit. You can bet everyone just moved their time table ahead to get as close to the front of the line as possible.
The bailout does not address the fundamental problem of 5 to 10 thousand homes going into foreclosure every day (and all the homes on the market). It is a tempory feel good pretty bandaid. something like 2.2 trillion dollars worth of this junk was written (just by Goldman Sachs if I remember). As more of this paper goes bad, they will be back for more bailout money. I suspect they will not free up the credit markets, they know whats coming, it was just a last chance raid on the taxpayers before every one got on the same page. I think main street understands they have been had.
October 3rd, 2008 at 4:13 pm
#75 tBay Says: “Hopefully by the time the $7500 tax credit does start to phase out, GM will be ready to release the Volt 2.0 which should be considerably cheaper.”
————————————————————————————–
Actually, GM has said they already have over a dozen improvements for cost and performance in the 2012 model. It may be that the Volt just keeps getting a little better every year. Maybe GM has stolen a chapter from Toyota’s handbook. Wouldn’t it be great if GM could beat them at their own game?
October 3rd, 2008 at 4:16 pm
#85 cautious fan
“Will this subsidy actually create MORE jobs. Is GM going to increase their production rates as a result of the subsidy”
It worked for the Prius. The subsidy only broadens the demographic of people who can finacialy afford this vehicle. Which inturn will make them sell more, which inturn will make GM produce more, which inturn will make GM either divert some of there exsisting workforce or higher more people. Which inturn will speed up the economies of scale, which inturn will bring down the price of the volt, which inturn will broaden the demgraphic of people who can finacialy afford it………..
see where i’m going with that.
Personally i would of like the Gov to wait until after GM annouced a price, but they wanted to piggy back it onto this free for all bill. Plus i would like to see the credit be able to be claimed by the dealer allowing people to see instantaneous savings, i think it will make it easier for more people to afford. Getting financing for a car that is 30K is alot easier than a car for 40K. Regardless of what type of credit you get from the feds. Even if you get the credit you’ll still be paying a payment as if it never happened. Unless you refinance the loan and put the credit towards it.
October 3rd, 2008 at 4:16 pm
Very nice.
The Volt used to look like something you’d gladly pay 40g’s for no matter what sort of tax break you might get.
All the pseudo “aerodynamic” changes on a vehicle that only goes 20 miles each way… to and from… wherever? Great now it’s 33 thousand for a car that still looks like it’s worth 15 thousand.
October 3rd, 2008 at 4:17 pm
GM may not yet have enough exact info to put on paper what the selling price of the Volt will be, but I think it is time they announce how and where the first cars will be sold.
Will there be any type of pre-sales deposit system put into place?
Is it still going to be a limited geographical roll out?
If it is a limited roll out area, will they be sold to customers who travel more than 100 miles to purchase a vehicle?
If sales will be available nationwide, will GM put in place a method where we can contact our local Chevy dealers to let them know there is real interest in this vehicle, and that we want them to sign up to be an authorized Volt dealer?
Will the GM-Volt.com list have ANY bearing on the first model year sales?
I guess what I am saying is that if I have to wait another two years and 28 days, only to find out that there is no way I would be able to purchase a Volt until 2014, it would really kill the mood……..
But in the mean time - Go GM - Go GM Volt Team!!
But don’t forget - NPNS
October 3rd, 2008 at 4:17 pm
#87 JonP Says: “I’m not an accountant but i thought a “tax credit” was subtracted off of your total tax due at the end of the year.
…
Guys is this wrong??”
————————————————————————————–
No, you have it right. A tax credit is subtracted from your taxes. A tax deduction is subtracted from your income.
October 3rd, 2008 at 4:23 pm
What? No concept pic any more?
October 3rd, 2008 at 4:26 pm
Well now this makes the Volt MUCH more appealing. I would not have considered it for the $30,000 number I’ve seen. But $22,500 is much sweeter.
October 3rd, 2008 at 4:27 pm
Duke Nukem #77
“That Volt is going to look really nice parked next to my Tesla Roadster.”
*** *** ***
So of the two Roadsters Tesla has delivered, Elon Musk has one and you have the other?
October 3rd, 2008 at 4:33 pm
Gm could have saved $$$$$ in R&D by putting a wind up key on it and we could engage it’s spring at night to our windmills.
Better yet. It would’nt take much to paint it to look like a Dutch wooden shoe. Call it the “Clog”!!
Cheap enough! Buy two! One for her and one for you! A pair of “Clogs”!
The Volt is not a Volt any more… The “Jolt” is a JOKE!
October 3rd, 2008 at 4:34 pm
WoW!!! This is Fantastic!!!
I could not be happier.
I would buy stock in GM now because it is gonna skyrocket the next couple of years.
October 3rd, 2008 at 4:34 pm
If the bottom line works out to $22,500. I will buy two as soon as available.
October 3rd, 2008 at 4:37 pm
#90 JonP
If it truly did work for the Pious then I’d eat my words. But did the credits really help boost PRODUCTION of the vehicles, or would Toyota have produced the same number anyway. Did production drop when the credit went away? You can’t say subsidies lowers prices and increases demand because companies can pocket the subsidy.
Fundamentally, I like electric cars and I think they’re good. I just think we’d all be better off if the gov’t stayed out of it. If you want to support an electric car, you should be free to do that. If you don’t want to support it, the gov’t shouldn’t steal your money and force you to.
October 3rd, 2008 at 4:45 pm
How many Prius plug ins will they sell before the Volt makes it to market. Will the Hymotion add on make a regular Prius qualify. Curious minds want to know!
October 3rd, 2008 at 4:45 pm
This is the kind of thing that drives me CRAZY about Federal Legislation! Why couldn’t they simply say that the amount of the tax credit is a certain fixed dollar amount regardless of price, or even a percentage of the purchase price of the vehicle? Why tie it to some convoluted kwh rating of the batteries!?!?!? This was a B.S. bill and it should NEVER have passed regardless of what happened to the economy! Maybe the economy should tank, then at least we could start with a clean slate instead of playing this tired old game! I’m sick of it, our congress just made this whole thing even WORSE, because now in addition to the $25B low interest loan the auto manufactures have just been gifted with this consumer tax credit which will simply be wiped out when they jack the price up $7500!!!
October 3rd, 2008 at 4:45 pm
Just because GM has gotten most of the publicity for its version of PHEVs doesn’t mean the Toyota/Honda/Nissan versions will be any less desirable. Toyota, after all, did a pretty good job with the Prius 2G. So if you don’t get your $7,500 tax credit on a Volt, maybe you’ll get it on a better, Japanese-nameplate car.
October 3rd, 2008 at 4:48 pm
Dave G #89
“Actually, GM has said they already have over a dozen improvements for cost and performance in the 2012 model. It may be that the Volt just keeps getting a little better every year”
*** *** ***
Lutz has already stated that one thing that could not be done for the 2010 Volt is “cost optimization”. That will have a significant effect on the cost of the Volt and with increased volume in 2011 may drop the price significantly. One of the improvements in 2011-2012 that I’m looking forwrd to is the use of super caps to buffer the battery and capture regen. braking.
October 3rd, 2008 at 4:48 pm
#95 Mike - “Well now this makes the Volt MUCH more appealing. I would not have considered it for the $30,000 number I’ve seen. But $22,500 is much sweeter.”
——————————–
Mike has the right idea. Instead of GM doing the ‘expection management’ of the public by quoting figures of $40,000 for the Volt; we, the public, need to do the ‘expectation management’ of GM and let them know where they need to be with price.
October 3rd, 2008 at 5:35 pm
[...] Via GM-Volt [...]
October 3rd, 2008 at 5:38 pm
One thing we have on our side and that’s Lyle. As the sale of the Volt gets closer and we hear GM saying, well the Volt will be $45K and then you get your tax credit, well that would be more than enough for a Re-Volt on GM. Lyle, I trust you’ll be the one leading the charge, letting GM know that this will not be acceptable at all. A Volt over $30~$32K is about where I’m willing to draw the line and look at other than GM products.
October 3rd, 2008 at 5:46 pm
At first I was all excited about the Volt. I have solar panels and I produce more electricity than we use and the thought of our limited driving got me excited, I am 76 years old and on a fixed income but we manage to live very comfortably. I have a 2000 Buick with only 38,000 miles on it so I will probably just drive it for the rest of my life.
October 3rd, 2008 at 5:47 pm
#102 Derrick Says: (on the tax credit) “Why tie it to some convoluted kwh rating of the batteries!?!?!?”
————————————————————————————–
Because the kwh rating of the battery has a direct relation to how much gas will be saved. It also has to do with the fact that batteries this large are a new piece of the puzzle and haven’t yet been used in any production volume.
October 3rd, 2008 at 5:47 pm
Even with the tax break the production Volt is too ugly to drive. I stopped waiting for that monstrosity and am very happy with my new BMW 135i.
October 3rd, 2008 at 5:51 pm
Another electric car from the Paris Auto Show:
http://reviews.cnet.com/8301-13746_7-10057558-48.html?part=rss&subj=news&tag=2547-1_3-0-20
October 3rd, 2008 at 5:52 pm
#103 Ken Says: “Just because GM has gotten most of the publicity for its version of PHEVs doesn’t mean the Toyota/Honda/Nissan versions will be any less desirable. Toyota, after all, did a pretty good job with the Prius 2G. So if you don’t get your $7,500 tax credit on a Volt, maybe you’ll get it on a better, Japanese-nameplate car.”
————————————————————————————–
The Toyota Prius is the best hybrid on the road. Toyota and Honda are great car companies. But I don’t see them doing anything significant with plug-ins. The only thing that’s been mentioned is a fleet test of a Prius plug-in in 2010. Note that Toyota was upset with this bill because their Prius plug-in plans didn’t even meet the minimum kWH for a any part of the tax credit.
October 3rd, 2008 at 6:01 pm
Sixty Minutes is doing a special on electric cars. The trailer features a Tesla but you have to believe the Volt will likewise make an appearance:
http://reviews.cnet.com/8301-13746_7-10058119-48.html?tag=mncol;posts
October 3rd, 2008 at 6:01 pm
For starters…your not gonna be first when it comes out. So stop belly aching about the price.
Secondly, it will be at a lower cost and production ramped up by the time it’s widely available for all of us. Honestly I’ll wait 12 additional months for version 2.0
Further, competition will bring it down and if your in the market for a $20,000 ride…the Cruze is very, very nice….and 40+ mpg is sweet and finally from GM.
Sorry if this is a repeat…I did not read all previous 100+ posts.
Nice deal on the tax deduction!
Our US Government that all of us here just bailed out…should demand tax breaks for US made products ONLY!
Let Japan (and I have nothing against our good friends) Fund their own tax breaks for their factories.
Keep the money here people.
No more free rides for non US manufacturers.
October 3rd, 2008 at 6:05 pm
#104 Grizzly Says: “Lutz has already stated that one thing that could not be done for the 2010 Volt is “cost optimization”. That will have a significant effect on the cost of the Volt and with increased volume in 2011 may drop the price significantly. One of the improvements in 2011-2012 that I’m looking forward to is the use of super caps to buffer the battery and capture regen. braking.”
————————————————————————————–
Just to be clear, the first Volt will be for the 2011 model year. These 2011 Volts will start selling in November of 2010. The second model of the Volt will be the 2012 model year.
Yes, adding a large capacitor with the battery might help with instantaneous power both to and from the motor. But I do remember someone saying that it wouldn’t be that simple. He said the way capacitors behave, you wouldn’t be able to just add it in parallel with the battery. The cap might need it’s own management system.
October 3rd, 2008 at 6:12 pm
If the battery is A123, it won’t need a capacitor.
October 3rd, 2008 at 6:17 pm
Cool!
My electric MOPAR will now be cheaper!
Who cares about that ugly excuse for a Volt!!!
October 3rd, 2008 at 6:28 pm
Dave G #115
“The cap might need it’s own management system.”
*** *** ***
That could be why they scrapped it for the first version.
October 3rd, 2008 at 6:33 pm
If GM charges too much they will give away many more of those first 250,000 tax credits to Toyota, Honda and others. GM (and everyone else for that matter) has a strong incentive to bring these puppies to market early and price them low. Pricing it high is a double mistake (you increase your competitors’ use of tax credits and reduce your own), and everyone gets that.
October 3rd, 2008 at 6:33 pm
[...] Here is GM-Volt.com’s announcement of the tax credit var disqus_url = ‘http://beutelevision.com/blog2/2008/10/03/gm-volt-could-get-7500-tax-credit/ [...]
October 3rd, 2008 at 6:35 pm
$7500 tax credit is nothing to sneeze at. If CA coughs up some rebates as they did for the original electric vehicles the \Volt could wind up about the same price as the RAV4-EV, which would be pretty good for almost a decade later.
October 3rd, 2008 at 6:41 pm
Sorry, but I have to disagree with the majority here. This whole bailout is ’sad’ from the standpoint that those responsibile for this mess will never held be held accountable.
How can anyone look upon this ‘tax credit’ as being American. It is nothing more than a national lottery with the winners being the ‘fortunate few’ who choose or have the opportunity to buy early. Everyone one else with get the ’short end of the stick’ as someone stated just the other day.
But, of course I do agree with Lyle — long live the USA, GM, and the Chevy Volt.
October 3rd, 2008 at 6:53 pm
[...] the story. Keep in mind…while this sounds great…this article is from the GM Volt website… GM-VOLT : Chevy Volt Electric Car Site
October 3rd, 2008 at 6:53 pm
#122 Estero Says: How can anyone look upon this ‘tax credit’ as being American. It is nothing more than a national lottery with the winners being the ‘fortunate few’ who choose or have the opportunity to buy early. Everyone one else with get the ’short end of the stick’ as someone stated just the other day.”
————————————————————————————–
Well, if it’s a lottery then there’s 250,000 winners plus some additional part of the credit for a year after that. In other words, it’s not just for the first 10,000 2011 model year Volts. It will probably go until 2014, maybe longer. So if you want a Volt, I don’t think you’ll be left out.
October 3rd, 2008 at 6:54 pm
Side note: GM announced they are shutting down the Moraine Plant early today…last day is Dec 23.(Trailblazer, Envoy, Saab 9-7x and Envoy Denali)
http://columbus.bizjournals.com/columbus/stories/2008/09/29/daily41.html?ana=yfcpc
They elimated the second shift Tuesday (about 1,000 jobs), then once they got them out they immediately announced the axe for the other line…originally it was supposed to run through 2010.
October 3rd, 2008 at 7:00 pm
It seems that a major use of the electric energy will be used to heat or cool the Volt or any all-electric car. As strictly a novice opinion/idea it seems the less space to heat or cool, the less energy needed for this purpose. Would it be feasible to have removable Styrofoam blocks or an automated inflatable barrier available to place in the unused back seat area for those that seldom use the space? This could cut the cooled space in half.
October 3rd, 2008 at 7:09 pm
I’m quoting myself from a February posting but …
Currently the Canadian federal government offers a rebate of up to $2000 for fuel efficient vehicles. The BC provincial government offers a 50% reduction of the sales tax payable, up to a maximum of $1,000. I think a reduction or elimination of sales tax is a better option than a rebate as it does not influence car manufacturers and dealers to “artificially” inflate the sale price.
Three years ago, I purchased a new Suzuki Aerio SX. At that time, the federal Goods and Services Tax (GST) was 7%, and the Provincial Sales Tax (PST) was 7%. The list price was about $21,000 and with delivery and various other charges - the price was about $22,500. Taxes (a total of 14%) added $3150 to the purchase price!
Even with the currently reduced GST rate of 5%, new cars in BC have both GST plus PST added to the purchase price, for a combined rate of 12%. On a $35,000 Volt, 12% would be an additional $4200. I dearly hope that by 2011 - that the federal and provincial governments make EREV like the Volt “tax free”. I think that this would be much more effective than offering rebates.
October 3rd, 2008 at 7:14 pm
Looks like the Congress and their constituents recognize the leadership of GM and the Volt electrification project. In little over two years GM has managed to completely turn around the image of a stodgy old school car company to one that is leading the electrification of transport. No small feat and worthy of great praise. With this GM-Volt website claiming some 40k members - it also seems destined to be a huge financial success.
All in all a rather remarkable accomplishment for a public/private sector collaboration that makes a major contribution to Global Energy Independence. It IS a new world and the old players gonna have to get used to it!
October 3rd, 2008 at 7:31 pm
The same bill with the tax credit includes an adjustment to the AMT.
“AMT Fix
A “fix” or “patch” to the alternative minimum tax, or AMT, with the goal of minimizing the reach of the alternative levy (but not eliminating it) is a significant part of the tax provisions in the new law.
In 2007, the AMT exemption, which largely determines who falls under the alternative system, was set at $44,350 for single individuals and $66,250 for married couples filing jointly, but for this year these amounts were set to revert to just $33,750 for individuals and $45,000 for married couples filing jointly. The new law sets the exemption amounts at $46,200 for individuals and$69,950 for joint filers for 2008.
The measure also extends and liberalizes the ability to take personal tax credits against the AMT and mitigates the effects of AMT when it is triggered by “phantom income” from incentive stock options, through a refundable credit.
“Overall, these measures are estimated to keep about 21 million taxpayers free of the clutches of the AMT for 2008, but what will happen in 2009 and subsequent years is still anybody’s guess,” said Luscombe. ”
http://www.ibtimes.com/prnews/20081003/il-cch-bail-out.htm
And would people who know nothing about taxes and economics please stop spouting malarkey? Thanks in advance.
October 3rd, 2008 at 7:32 pm
Posted in yesterday’s thread, but on topic here.
Just had a BIG post gobbled up. arrrgh. It was on the Alternative energy bill, tacked on the end of the 700 billion bailout bill pp191-195.
The key parts are:
‘‘(B) PHASEOUT PERIOD.—For purposes of this subsection, the phaseout period is the period beginning with the second calendar quarter following the calendar quarter which includes the first date on which the total number of such new qualified plug-in electric drive motor vehicles sold for use in the United States after December 31, 2008, is at least 250,000.
The full credit is limited to the first 250,000 cars, then declines to zero over the next year.
They MUST have a battery of more than 4KW and be recharged from an external source:
The maximum credit itself is based upon weight, and for us says:
…. ‘‘(A) $7,500, in the case of any new qualified plug-in electric drive motor vehicle with a gross vehicle weight rating of not more than 10,000 pounds, blah blah blah.
Note: The credit is built from a base of 2,500 (4KW) and then add $417.00 for each KW. In the case of the Volt the total would be $7,504. Amazing how GM managed to position right on the upper limit.
/Straying into Statik’s territory with that last comment hehehe.
The race is to get the biggest share of the 250,000 vehicles, as possible. I think GM will ramp up significantly in the second year if the bill stands! (now passed). Gaining market share, while the credits are in place, is critical, the race is on. Start your engines, I mean, charge your batteries lol.
If you think that $417 per KW is good, the H2 subsidy went from $500 to $1,000, woo hoo.
And in response to someone here, yes the tax credit, or part thereof, can be carried over to the next year if not all used.
Off Topic, the $2,000 limit for residential solar/wind systems has been removed as well, and the period extended for another eight years.
Big wind farm tax credits extended for another year.
Solar extended as well, forget time period (there’s just so, so much).
Special tax provisions for steel mills,
….
blah, blah, blah.
….
Special tax provisions for Coal EXPORTERS, WTF?
/I mean nothing to see here, move along, please.
Sorry about the large post, but it took hours to read & understand that bill.
October 3rd, 2008 at 7:41 pm
Too bad I won’t be buying that car now that GM made it look like an Americanized Prius.
GM has failed to win me over, yet again. I have four GM vehicles right now, and other than my trucks my GM cars will never be newer than 98.
October 3rd, 2008 at 7:42 pm
Let’s see how “Middle America” they price the car. Last I checked, you can by a nice Mercedes Benz for $40g’s!
I am on the wait list for the Volt, but if GM doesn’t price this car in the mid $20’s, I’m out. They can’t make up their loss on the American public on one vehicle.
Wise up GM!
October 3rd, 2008 at 7:48 pm
Goodbye Matthew.
October 3rd, 2008 at 7:49 pm
Now that this has passed, I honestly expect to see SMART hop in and take a good chunk of this market/rebates.
The car is a easy convert, they already have a fleet on the ground (non Lithium), with plans to get out 1,000 (lithium) in 2009 (around the world) and 10-15K/US production by 2012….that was pre rebate.
With Zetsche on the record at 16,000 pounds at the London autoshow this year, that translates to around 26-27K US…and another 6K off….thats $20,000.
BTW, SMART Ed lithium range is 150 miles on a assumed 12 kW pack.
I can see this car ramping alot quicker now (their connection with Chrysler should benefit them as well). The SMART brand itself is really only enjoying great success in North America and alot of resource are being diverted to marketing it and producing them for here anyway…success is mostly due to it passing safety requirements and the lack of anything else in its ‘class’
SMART ed would seem to draw the greatest benefit from this rebate. It has the lowest price structure due to it’s diminutive size and existing suitable platform (there is sufficient pack space already under the floor board) and would receive almost the fullest rebate.
Even though it is only 2 seats, selling a 150 mile range electric vehicle for $19,999 is a easy sale. Heck I bought a regular SMART tdi in Canada, just for the 69.8 MPG (real world) as a commuter…too bad they stopped bringing the tdi over once Americans started getting theirs.
Random SMART ed link from Paris, talks about range, production plans, etc. (pre rebate)
http://www.popularmechanics.com/blogs/automotive_news/4285575.html
October 3rd, 2008 at 7:59 pm
The $7500 tax credit is my money anyway. I might as well get it back.
October 3rd, 2008 at 8:06 pm
#130 NZ David
Sorry about the large post, but it took hours to read & understand that bill.
—————
No problem at all…have you seen some of my posts? Lol. I was trying to read through it all myself, but it has been a busy day.
You referenced it, so I wanted to comment:
—————
Off Topic, the $2,000 limit for residential solar/wind systems has been removed as well, and the period extended for another eight years. Big wind farm tax credits extended for another year.
Solar extended as well, forget time period (there’s just so, so much).
—————-
It was really nice to see they got the solar extended (8 YEARS!!!) inside this bill, seems like it gets neglected and has a tendency to run out for a couple months (I think it has happened 3 times in the last decade?), then they have to jam it through later when everyone in the industry starts to squawk (or die)…then they have to retain/reteach everybody…2 steps forward, 1 step back.
The industry really needed policy certainty behind it.
As I understand it, this bill will:
1.) Extend for 8 years the 30-percent tax credit…HUGE
2.) Kill the 2K cap $2,000, now creating a true 30-percent tax credit…HUGE
3.) Allow AMTers to get this credit…HUGE
4.) Allow for great utilization and capitalization of manufacters given the time length of enactment (stars Dec 31, 2008 of course)
Just wanted to echo/expand your point…solar is kind of my first love for eco-friendless, or getting off oil, or gaining independence, or whatever the heck you want to call it.