Taxing: A $50,000 Tesla Model S or a $33,000 Chevy Volt?
Or neither?In 2011 environmentalists and foreign-energy hawks will have a number of interesting choices available when purchasing their next car. Two of the top picks will, undoubtedly, be the Tesla Model S and the Chevy Volt.
After tax incentives, the Tesla Model S will cost about $50,000,the Chevy Volt about $33,000, although it seems the Model S will be more of a luxury sedan than the Volt.
The Model S will offer an electric range of about 225 miles between charges. The Volt should offer at least 300 miles, but the Volt also offers the ability to use gasoline to generate electricity.
Personally, I'd love to have both vehicles, but neither make sense for my driving needs. However, if I had to pick one, it would easily be the Volt and for one reason only, cost.
Which brings me to a touchy subject. Tax incentives for wealthy people. Or, more precisely, tax incentives for cars costing far above $30,000 - a number most Americans cannot afford. Shouldn't the government focus it's tax incentives on cars with the most mass-appeal? Cars that provide the quickest adoption for the greatest numbers possible?
If you can afford a $50,000 auto, how badly do you really need a $7500 tax credit?
Labels: Chevy Volt electric vehicle concept, tax credits, tesla electric car
posted by Dahcredyns at
8:52 AM
8 Comments:
Great. So I, as a taxpayer, can subsidize Brad Pitt's next vehicle purchase while I continue to drive my clunker!
I've heard the plug-in Prius might only cost about $30,000. With a $7500 tax credit, I might be able to afford such a vehicle, might.
we've been paying tax incentives on suv's for years and no one seems to care so why not these cars?
EVs are most efficient in short range driving. Over longer distances carrying around those heavy batteries wastes a lot of energy. Some studies suggest that EVs are most efficient when they can be charged every 20 miles or less.
So why create EVs that have a range of more than 100 miles for instance? Focusing on EVs with less range could drop costs pretty significantly, and make adoption for the masses much more possible, much sooner.
If a 100 mile EV doesn't work for you, then an EV probably isn't the right car for you.
I'm just arguing that plug-in tax legislation is striving for efficiency in, possibly, an inefficient manner.
zendude-
some of us have cared about those SUV incentives, but that's a good point.
HelpingBradPitt-
Current hybrid tax credit is disallowed for taxpayers, filing joint, with AGI of around $156K (I forgot the exact number). So if Brad Pitt, or anyone in his bracket wants a Tesla or a Volt, he would have to pay the full fare.
anon-
That was true of the hybrid tax credit, but PHEV legislation is an entirely new piece of legislation, was it written under the same financial constraints?
Personally, I don't really care if Brad Pitt gets a tax credit or not.
My point is incentivizing the greatest change possible right now, and creating competition as we do it.
Personally, I think this kWh-driven legislation is counterproductive to immediate change. It lets companies slowly roll out products, such as the Volt, without ever competing against Prius-like efficiency for the next 5 to 10 years.
To me, that's completely unacceptable. Too often, when you think you have enough time to change, you become complacent. This legislation smacks of complacency.
Toyota is going to be rolling out EVs, PHEVs, and hybrids concurrently. Considering the cost differences between these different products, such a portfolio seems obvious and necessary, especially in the new economy.
Thus, I'd like to a tax credit for any vehicle that achieves 50 mpg on the EPA's city cycle. Such vehicles will require advanced technologies, such as lithium batteries.
"Shouldn't the government focus it's tax incentives on cars with the most mass-appeal? Cars that provide the quickest adoption for the greatest numbers possible?"
I would agree, except Toyota has already won that game. A 50 MPG credit will become a Toyota/Honda credit as they would be best able to build those types of cars/batteries.
As lame as it is from an efficiency perspective, and I agree our PHEV credit is not the best way to limit oil dependency, I would argue it is the only way to give GM (and Ford/Chrysler if they choose, but neither of them have made any investment either way) a fighting chance. And that means it's the only way to give the US a fighting chance at having a battery powered car industry.
But the Tax credit isn't enough, either. IF the Obama administration invests heavily in a battery manufacturing consortium, as we did with Silicon chip manufacturing in the 80's that begot Intel's dominance, GM may be able to go to much higher volumes with the Volt gen 2 than we are expecting. That would probably be GM's only shot at long term, mainstream success against cheaper Toyota/Honda hybrids with lithium batteries that should be out by then.
I figure it will be easier for hybrid technology to cost effectively scale up into PHEV tech, than it will be for GM's PHEV tech to cost effectively scale down into low cost hybrids, without serious govt investment.
My bottom line is that if the US wants a battery powered car industry, the large battery tax credit is needed to support the Volt gen 1, however inefficient it is in terms of oil dependence, AND the Federal govt will have to invest heavily in a battery consortium to support GM for the Volt gen 2. If our goal isn't a comprehensive battery industry program, I would agree that the tax credit is poor oil policy.
I hear you Alcatholic, but when it comes to foreign energy dependence, I just don't think we have the luxury of time. We've gotten pulled into Iraq twice now because of oil, yet gas was relatively cheap. With worldwide energy demand primed for huge growth, the potential problems seem much more dangerous.
The world has faced massive, worldwide crises in the past and I fear that we think abrupt change isn't possible. Somehow the world is meant to advance humanity, despite our stupidity.
It might be, but I say it's a huge gamble.
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