We (tax) break for plug-ins *

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* This post updates an earlier version with corrected price information on the Tesla Roadster.

The pork barrel has gone high tech.

Generous tax credits for buyers of plug-in electric vehicles were among the incentives larded into the Wall Street bailout package this month to ensure its passage by skeptical members of Congress. Buyers of plug-in electric vehicles will be eligible for a tax credit of up to $7,500 based on the power of their batteries.

Many environmentalists see plug-in electric vehicles as the next big advance in fuel economy beyond the current generation of gasoline-electric hybrids like the Toyota Prius. Unlike hybrids currently sold in the U.S., they will be able to travel considerable distances on electric power alone, with a gasoline engine or gasoline-powered generator providing backup power when the battery is depleted.

The vehicles have required costly development of a new generation of lithium-ion batteries — and that means they’ll be priced accordingly. GM’s Chevy Volt, slated to be in showrooms by November 2010, is expected to cost $30,000 to $40,000.

Supporters say the tax break will help defuse potential sticker shock.

“These kinds of tax credits will make it more attractive to an early adopter to put one of these vehicles in their garage,” said GM spokesman Dave Barthmuss. “So yeah, we’re happy.” ...

... The tax credits are modeled on the breaks given to buyers of “traditional” hybrid vehicles such as the Prius and the Chevy Malibu hybrid. Those credits range up to $3,150 per vehicle but begin to phase out after a manufacturer sells 60,000 hybrids. Toyota and Honda have passed the limit.

The plug-in tax credits will be available on vehicles sold from Jan. 1, 2009, until the end of 2014. Vehicles with batteries of at least four kilowatt-hours will qualify for a $2,500 credit. An additional $417 credit is provided for each additional kilowatt-hour, with a maximum credit of $7,500 for a vehicle weighing less than 10,000 pounds.

(Unlike a deduction, which lowers the amount of a person’s income subject to taxation, a credit reduces the taxes owed on a dollar-for-dollar basis. In other words, a $2,100 tax credit is like getting a delayed $2,100 discount on the price of a new car.)

Barthmuss said the Volt, which GM has said would have a 16-kilowatt-hour battery and a 40-mile electric-only range, apparently will qualify for the full credit. GM is also planning a plug-in version of its Saturn Vue hybrid, and Nissan is developing an electric car for sale in the U.S.

The $109,000 Tesla Roadster, which can travel 244 miles on a single charge and is on sale now, also appears to qualify for the full credit,but only for those sold starting in the new year. (We earlier erred in listing the base price as $100,009.)

Toyota expects to have several hundred plug-in hybrid vehicles in the hands of fleet operators by late 2009. The automaker hasn’t said much about the vehicles, but they’re expected to be plug-in versions of the Prius, with an all-electric range of 10 miles or so.

The tax credits begin to phase out after 250,000 qualifying vehicles are sold industrywide in the United States. Only new vehicles are eligible, so existing gas-electric hybrids that have been converted to plug-in operation — a process that costs $6,000 to more than $10,000 — won’t qualify for the credit, said Genevieve Cullen, vice president of the Electric Drive Transportation Assn., which represents utilities, battery makers, car companies and others with skin in the plug-in game.

Even with gasoline prices down 40% from their all-time highs of summer, the drive to develop plug-in vehicles will continue, especially given new rules in California that will require automakers to sell a certain number of low- or zero-emission vehicles in the state.

“Today’s falling gas prices seem to make investments in new technology a little less imperative, but I think everybody who worked on this bill knows that we have left the age of cheap gas,” Cullen said. “We may revisit it occasionally, but it’s over.”

-- Martin Zimmerman