WASHINGTON -- General Motors hopes for a $7,500 federal tax credit to help it sell plug-in hybrid Chevrolet Volts may soon be realized.
The U.S. senate Tuesday evening passed a complex and wide-ranging tax bill, covering everything from extension of credits for wind energy producers to expanded exemptions from the alternative minimum tax.
Riding along is a small provision creating a new tax credit for buyers of plug-in electric vehicles – none of which is on the market yet. The credit would start at $2,500 and rise to as much as $7,500 for a light-duty vehicle, depending on battery capacity.
A buyer of the Volt would appear eligible for the maximum.
After many months of wrangling over parts of the legislation, the Senate vote was an overwhelming 93-2. The House of Representatives must still act on the bill, but there is strong sentiment in Congress to get a tax bill done this week before lawmakers break for elections. The White House dropped objections to some provisions unrelated to the plug-in hybrid tax credit.
Weve expressed our support for the Senate bill, GM spokesman Greg Martin said before Tuesday nights vote.
Still unclear is whether Congress has responded to objections from Toyota Motor North America Inc. The company complained, without naming the Volt, that a previous version of the bill would benefit only one plug-in hybrid design.
Toyota officials said late Tuesday that the latest version appears to address their major concern.
The Volt, due in late 2010, is to run 40 miles on all-battery power. Then a small internal combustion engine would start, extending the range, if needed. GM has warned prices could approach $40,000.
Toyota is working on a plug-in version of the Prius that would rely more on blending battery and gasoline power.
The Senate-passed measure would begin to phase out tax credits for plug-in electrics after 250,000 have been sold.
Thats a contrast to the 2005 law that established tax credits for alternative vehicles, mainly gasoline-electric hybrids. Those credits phase out for the customers of any company that sells 60,000 qualifying vehicles.