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Thursday, November 11, 2010

GE: Eating Up EV Tax Credits

Is there a downside to the public to GE's announcement that it will buy 25,000 EVs, including 12,000 Chevrolet Volts?  

The tax credit for EVs phases out after a manufacturer sells 200,000 of them.  From Public Law 111-5, Sections 1141-1144

    `(2) 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 number of new qualified plug-in electric drive motor vehicles manufactured by the manufacturer of the vehicle referred to in paragraph (1) sold for use in the United States after December 31, 2009, is at least 200,000.
By gobbling up EVs, GE certainly helps to jump-start the industry, but they also gobble up future tax credits that consumers would have gotten, unless GE opts to forego the EV tax credit.  Which would be bad business.

7 comments:

The Grand Inquisitor said...

I don't see any good reason why GE shouldn't gobble up the credits.

This car poses a lot of problems, and in particular reliability, that I think a fleet management could manage a lot better than an American family.

I think the Volt is a particularly bad car, but it probably does GE's image some good.

There's no good reason for this credit to exist at all, since the car is already radically subsidized by the American people creating a defacto discount with or without the tax credit.

Let GE have their cars if they want them, eat up all the credits, and see how this car competes with a well equipped BMW of similar size that gets the same mileage on an actual road trip (not to even compare to a diesel that gets much better mileage.

And don't be surprised if another tax credit is announced, anyway. We can always print more money, after all (joke).

m12edit said...

I'm curious to see how and what tax credits the Volt gets since there is a mechanical drive connection between the engine and the wheels, unlike what was originally promised. It is not a true serial hybrid, but rather a parallel hybrid biased to the electric motor (as opposed to a Prius, which is a parallel hybrid biased toward the gasoline engine).

Ronnie Schreiber said...

This car poses a lot of problems, and in particular reliability, that I think a fleet management could manage a lot better than an American family.

And you say this based on what experience with the Volt? Why would you say that it's not going to be reliable? It shouldn't be any more unreliable than a Toyota Prius or Ford Fusion hybrid.

I think the Volt is a particularly bad car,

Again, based on what? Have you driven or ridden in one?

It's actually a very impressive bit of engineering. I don't know if it will sell well and at a before-tax-credit price of $40K it's no bargain, but it's still a pretty cool car. I write for The Truth About Cars, no friend of General Motors for sure, it was the first site to predict GM's bankruptcy back in 2005. Both of my colleagues who drove and reviewed the Volt say that it's an impressively engineered car.

Let GE have their cars if they want them, eat up all the credits, and see how this car competes with a well equipped BMW of similar size that gets the same mileage on an actual road trip (not to even compare to a diesel that gets much better mileage.

"actual road trip". Nothing like gaming the test, eh? The Volt was never optimized for high mileage on road trips. I don't think that BMW 1 Series, about the same size as the Volt, gets better than 30mpg on the highway, and the Volt was getting 28 when Mike Karesh was driving it with a heavy foot in stop and go traffic.

I'm curious to see how and what tax credits the Volt gets since there is a mechanical drive connection between the engine and the wheels, unlike what was originally promised. It is not a true serial hybrid, but rather a parallel hybrid biased to the electric motor (as opposed to a Prius, which is a parallel hybrid biased toward the gasoline engine).

No, the Volt is the most advanced hybrid on the road today. It has four modes. A pure EV mode where it uses the battery (or genset) and the larger electric motor. At higher speeds, since the larger motor works through a fixed gear ratio and electric motors aren't efficient at high speeds, the secondary electric motor which is normally part of the genset is used to adjust the gear ratio of the gearset. The third mode is running the main motor from the genset - this is extended range mode. The fourth mode is at very high speeds and the combustion motor does provide some of the motive force.

It's a very sophisticated system and rather clever since both the Ford and Toyota hybrids start with the same basic components (engine, motors, planetary gearset).

The Volt is a car that works as a straight EV some of the time, a serial hybrid some of the time, and a parallel hybrid some of the time.

Did GM screw up the PR by insisting it was a an EV with a range extender, perhaps, but unlike any of the other hybrids on the road, the Volt does indeed have a pure EV mode as well as a serial mode, also not yet available from anyone.

GM deserves plenty of criticism, but a lot of the Volt bashing is just plain unfounded.

Just looking at it as a car, particularly the first generation of a new drivetrain concept (remember, Toyota's currently on the 3rd gen Prius), the Volt is very impressive.

Anonymous said...

GE also has a vested interest in making sure the EV market gets off the ground. They have made a substantial investment in EV infrastructure with their "Watt Station."

http://www.cleanfleetreport.com/electric-vehicles/charging-electric-vehicles/ge-electric-car-charging-station/

Fiftycal said...

GE is totally gaming the system. In addition to the $7500 tax credit, there is a proposal to allow business to write off capital costs in the first year of purchase. So, IF GE gets a fleet deal for say $30,000 a car, they get a $7500 a car PROFIT on day one! Then drive them for a year and a day and sell them for $20,000. MORE PROFIT!

Anonymous said...

Someone has to start the purchase of these vehicles, and whether it's a publicity stunt or not, it still will help to get people thinking more about electric vehicles. Plus, at least they are making a VERY substantial investment to verify these vehicles will work.

Drew Sheahan
www.VirtualFleetSupervisor.com

Travis said...

Will this add to the cost of the car insurance?