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Senate OKs Plug-In Credits, Toyota Frets; Free Press Lyrical about Plug-Ins

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  • Felix Kramer
    Today s amazing moments: * the long-hoped for extension of energy tax credits including incentives for PHEVs: * what Toyota said when outclassed by GM s large
    Message 1 of 1 , Sep 23, 2008
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      Today's amazing moments:
      * the long-hoped for extension of energy tax credits including
      incentives for PHEVs:
      * what Toyota said when outclassed by GM's large batteries;
      * read to the end and get the pleasure of seeing a long-time Detroit
      automotive journalist who "gets" PHEVs beautifully the Volt as the
      "dawn of a new era" and "a first step toward a new kind of car for everyone."

      The Senate has passed by an overwhelming 93-2 vote a long-awaited
      energy tax bill. It extends solar investment tax credits to 2016 and
      gives wind credits one year and geothermal two years -- far better
      than letting those lapse! See
      for a general summary.

      The measure includes the substantial credits for plug-in cars we've
      been hoping for. Here's a summary by Genevieve Cullen of the Electric
      Drive Transportation Association www.electricdrive.org :
      Tonight, the Senate passed a tax extender bill that includes the
      plug-in electric drive credit that EDTA has been working to move
      since the beginning of this Congress. Specifically, it provides that
      plug-in electric drive vehicles with batteries of at least 4 kWh
      qualify for a $2,500 credit. An additional $417 is provided for each
      additional kWh, up to $7,500 for vehicles up to 10,000 lbs; $10,000
      for vehicles up to 14,000 lbs; $12,500 for vehicles between 14,000
      and 26,000 lbs and $15,000 for those over 26,000 lbs. The value ramps
      down in value after the number of vehicles sold in the U.S. reaches
      250,000. The credit expires at the end of 2014.

      Find the text of the measure at
      . The PHEV provisions are in Section 205, begining at PDF page 78.
      The credits apply only to "new qualified" vehicles -- unlike the
      proposals from the Senate "Gang of 10," conversions are not included.
      (That issue can be revisited next year.)

      ONE THING IT MEANS: Greentech Media story on today's developments,
      "Senate OKs $18B in Tax Credits"
      concludes: The $7,500 tax credit for plug-in hybrids gave cheer to
      Felix Kramer, co-founder of CalCars.org, which promotes plug-in
      hybrid and electric vehicles. "This will have an enormous impact," he
      said. Given his estimates that automakers could make current hybrids
      into plug-in hybrids for an additional $3,000 to $5,000, the tax
      credits "could conceivably entirely remove the cost increment that
      carmakers say is the cause of their reluctance" to build plug-in hybrids.

      WHAT HAPPENS NEXT? The House, which has passed legislation with
      different provisions, may re-visit the issue as part of negotiations
      about versions. If all goes well, the bill will go to the President,
      who has indicated he will sign it.

      prospectively at a disadvantage because of its plans to begin with
      PHEVs with far smaller batteries than those in the Chevy Volt. That
      led to Toyota's Congressional testimony last week in opposition to
      the original 6kWh minimum planned by the Senate. The final version
      dropped to 4 -- still too high for Toyota to be happy. Below we
      include Toyota's position and a report on the conflict.

      Both Senate and House bills key incentives to the amount of energy
      storage available which makes the most sense: the more kWh, the
      better the benefit. Ron Gremban, CalCars' Technology Lead, has
      developed a simple way of thinking about this that is largely
      independent of vehicle weight and design: for vehicles that charge
      once a day, every kWh in a well-built PHEV will displace up to 50
      gallons of gasoline a year with electricity.

      MORE ON TOYOTA'S PERSPECTIVE: This comes from the September 16
      Senate Energy and Commerce hearing
      . That URL also points to testiony by others including Brian Wynne of
      EDTA , Ed Kjaer of Southern California Edison and Thad Balkman of
      Phoenix Motorcars.

      TESTIMONY by Robert Wimmer, National Manager, Toyota Motor North America:

      Battery experts have estimated the cost of batteries for a plug-in
      hybrid to be $500-$1000/kW-hr. As such, the size of the battery pack
      will greatly influence the retail price of the vehicle and therefore,
      its market viability and sales potential. The Energy Tax package
      released late last week by the Finance Committee places an arbitrary
      6kW-hr minimum on pack size before receiving a consumer tax credit.
      Toyota believes this is counterproductive. It will discourage
      manufacturers from developing smaller, lower cost plug-ins that are
      affordable to the greatest number of consumers. Toyota agrees the
      amount of tax credit should be based on battery size, but it should
      begin at approximately two times the size of a typical hybrid
      battery, 1.2-2.0 kW-hr. This way the consumer market will drive
      plug-in vehicle design, not legislation.

      Before high-volume production can begin, significant challenges such
      as battery cost, durability and safety must be addressed. We intend
      to examine these issues when we introduce our next generation plug-in
      hybrid with Li-Ion batteries as a 2010 model. A significant number of
      these vehicles will be deployed in commercial fleets around the world
      to help Toyota quantify real-world durability, performance and
      customer acceptance.

      Toyota is also re-examining battery electric vehicles. Between 1998
      and 2003 Toyota delivered more than 1200 RAV4-EVs to customers in
      Arizona and California. Many of these were sold -- not leased -- to
      the general public, making Toyota the only Original Equipment
      Manufacturer at the time to sell full-performance EVs. With many of
      these still on the road and millions of miles of cumulative
      experience, Toyota understands the opportunities and challenges of
      producing and marketing battery EVs.
      [We can't resist noting here that had it not been for "Don't Crush"
      -- the successful campaign that led to the formation of Plug In
      America -- these cars would all have been off the road in 2005.]

      CNET: Sparks will fly over GM, Toyota plug-ins

      It's all been very gentlemanly so far. No name calling. No punches
      thrown. But a fight is brewing between heavyweights Toyota and
      General Motors over the way the government should support plug-in
      hybrid electric vehicles.

      Robert Wimmer, a Toyota research manager, told a Senate committee
      last week that proposed legislation "redefines plug-in electric
      vehicles to seemingly eliminate consumer tax credits for all but one
      plug-in vehicle design. Toyota believes this approach is counterproductive."

      He didn't identify the Chevrolet Volt by name. But the GM hybrid
      would be the main beneficiary of the bill, which would provide tax
      credits of up to $7,500. A plug-in hybrid being developed by Toyota
      might not qualify for a tax credit.

      The difference? The bill, as written, bases the credit on a vehicle's
      range in the electric-only mode. The Toyota design is expected to
      rely, more than the Volt does, on an alternating combination of
      electric and gasoline engine power.

      Said Wimmer: "We believe consumer incentives should encourage all
      plug-in designs and allow the consumer market to select winners, not

      GM spokesman Greg Martin challenged the assertion that only the Volt
      would benefit but said it is understandable that Toyota's testimony
      "would reflect their competitive interests."

      Also see a story in the Wall Street Journal about the Senate hearing,
      "U.S. Makers of Electric Cars Push for Consumer Tax Credits"

      MORE PHEV-CANDY: Another addition to those kudos we posted last week
      at "Our 1,000th Posting: A Moment to Celebrate"
      http://www.calcars.org/calcars-news/1000.html -- this one is by Mark
      Pheland, Detroit Free Press Columnist, who has covered the auto
      industry for 25 years.

      "Chevy Volt's value is as dawn of era" Sept. 21, 2008

      Two recurring strains of criticism surfaced amid all the hoopla over
      the Chevrolet Volt electric car last week:

      * It's too expensive. Nobody will buy it, and if anybody does, it'll
      be rich dilettantes, not the working folks who really need to cut
      their gasoline bill.

      * It doesn't go far enough. It's impractical for people who use one
      car for all their needs.

      Neither complaint is correct, but the way the misinformation
      proliferated across the Internet demonstrates how different the Volt
      is from any car on the road today.

      You can't judge the Volt based on traditional criteria like sticker
      price and trunk room.

      Don't think of it solely as a car. It's a lifestyle, a political
      view, a fashion statement and the coolest new gadget you can get.

      If GM gets the Volt right, it's the 1984 Apple Macintosh on wheels,
      smashing an old paradigm and setting America free. It's Mini Cooper
      compact cool mated to Prius environmental chic.

      It will also be a compact car likely to cost around $42,000 when it
      goes on sale, a premium small car with unique style and performance,
      like the $46,000 BMW 135i or $44,000 Audi A3.

      And it may be the only game in town if you want the latest and
      greatest technology on wheels, a vehicle that says you're smart,
      involved and want to thumb your noise at Big Oil and the despotic
      countries that produce it.

      Why did people stand in line all night to pay $400 for an Apple
      iPhone last year when other companies literally give mobile phones
      away? Because it was unique. Because it was the best.

      That's one reason the Volt's introductory price is immaterial. If the
      car keeps the promises GM has made -- 40 miles on battery power
      alone, and the ability to drive unlimited distances by using its
      onboard generator -- the first year's production will sell out the
      weekend the Volt goes on sale.

      The other reason not to fret about the initial price is that it will
      fall, and it will fall fast. The industrial model and product cycle
      that apply to the Volt are closer to the fast-paced development of
      mobile phones and laptop computers than the six-year cycle of most cars.

      Cost should fall quickly, and it would be very surprising if Volt
      buyers don't get substantial tax incentives.

      None of that makes the Volt the people's car, but GM plans to use its
      powertrain in other models.

      Concerns about the Volt's cruising range are even less significant
      than fretting over its sticker price, but they highlight the need for
      GM to explain the car to buyers. While electricity stored from an
      outlet provides enough energy to cover at least 40 miles (city or
      highway driving), the little gasoline-powered generator under the
      hood will keep the battery charged on longer drives.

      It's an elegant solution that engineers love, but it will take a
      while before less technically oriented people figure out they can
      drive the Volt cross-country all day, just like a conventional car.

      The Volt is the tip of the spear. If it works, GM plans to rapidly
      adapt its powertrain for high-volume cars with mass-market prices.

      It's not a car for everyone, but it's the first step toward a new
      kind of car for everyone.

      -- -- -- -- -- -- -- -- -- -- -- --
      Felix Kramer fkramer@...
      Founder California Cars Initiative
      -- -- -- -- -- -- -- -- -- -- -- --
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