Hatch, Cantwell Push For Incentives For Plug-In Vehicles And Smart Grid Technologies In Stimulus

Press Release

Today, Senate Finance Committee members Maria Cantwell (D-Wash.) and Orrin Hatch (R-Utah) moved to include tax incentives for plug-in electric vehicles to the stimulus package currently being considered by Congress. These incentives would increase production and adoption of plug-in electric vehicles, which will ultimately save consumers money at the pump and help reduce our country's dependence on foreign oil. The FREEDOM Act of 2009 builds on legislation authored by Cantwell, Hatch and Sen. Barack Obama (D-Ill.) in 2007 that provided up to $7,500 for consumers buying new plug-in electric vehicles. This bill was enacted into law last October as part of the Energy Bill of 2007.

While those consumer incentives were a vital first step, more needs to be done to bring these game-changing class of technologies to market. The FREEDOM Act of 2009 would also help ensure the United States establishes and maintains global market leadership in plug-in electric vehicle and component production, like batteries and smart grid technologies.

"America's addiction to oil impacts not only our economy, but every household in America," Cantwell said. "We need to take advantage of new technologies to bring our cars and trucks up to speed, save consumers money, create hundreds of thousands of jobs and diversify our country off of fossil fuels. The FREEDOM Act of 2007 made important strides, but more must be done to jumpstart this transition. By including these bipartisan measures in the upcoming stimulus bill, we will be injecting capital, confidence, and construction into our economy, and fundamentally improve our nation's out of date transportation system for the first time in over a century."

Current generation plug-in electric vehicles can attain fuel efficiencies approaching 70 mpg, and most importantly for consumers, charging a plug-in hybrid at current national average electricity rates would cost the equivalent of just one dollar per gallon of gas, reducing annual fuel costs by as much as 75 percent.

The FREEDOM Act of 2009 focuses on retooling incentives and increasing consumer tax credits for plug-in vehicles.

"Senator Cantwell and I were very pleased that several of the provisions in the FREEDOM Act were signed into law during the 110th Congress," Hatch said. "We share a vision for shifting our transportation sector away from its heavy dependence on fossil fuels and toward the electric grid as a major new source of transportation fuel. I see this year's FREEDOM Act as an important second step for the U.S. in that it provides additional incentives for manufacturers of plug-in vehicles and relevant technologies, incentives for transition technologies that will get us using plug-in hybrids, and larger incentives for consumers through tax credits for purchasing plug-in vehicles. American automakers and technology companies are uniquely situated to lead the world in producing electric and plug-in hybrid vehicles. This bill will give them a shot in the arm toward that end."

The linkage of electricity, transportation, and information technologies through plug-in electrics and smart grid technologies will transform the ways consumers use energy, significantly reduce the nation's greenhouse emissions, and spur export-driven economic growth.

The FREEDOM Act of 2009 provisions include:

• Manufacturer Investment/Retooling Incentives — 100 percent immediate expensing of investments in production property by plug-in electric vehicle and component manufacturers through 2013. Later investments would be eligible for 50 percent expensing through 2016. Manufacturers currently without tax liabilities can access unused AMT credits.

• Tax Relief for Car Buyers — Doubling the number of plug-in electric vehicles eligible for existing consumer tax incentives (from 250,000 to 500,000); and extending scaled incentives for 2- and 3-wheeled vehicles and low-speed vehicles.

• Plug-in Conversion Credits — Tax credits of up to $4,000 for consumers who invest in equipment to convert their existing hybrids to plug-in hybrid electrics.

• Deployment Incentives — Modify the depreciation schedule for smart meters from seven to five years (to match other schedule for other computer equipment) and augment existing tax incentives for the installation of electric vehicle refueling stations.

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