Vehicles like the Chevy Volt, under the Senate's new EV bill would qualify for a $10,000 federal EV tax credit.

Unlike some measures, the EV bills enjoy broad bipartisan support and were proposed by an alliance of Democrats and Republicans.  (Source: PAUL J. RICHARDS/AFP)
Federal funding could be a big boost to the fledgling industry, says proponents

Whether you view it as an investment in the future or a dangerous example of mild socialism, since the 1780s the U.S. has invested in new technologies, often handing businesses vast sums of money to get off the ground.  Among the most famous examples of this was land grants to the railroad companies in the 1800s that totaled to what would today be billions of dollars in value.  The resulting intercontinental railroad system helped turn the U.S. into a world power.

Yesterday, the U.S. House and Senate introduced legislation to continue this trend by financing the transportation wave of the future -- electric vehicles.  A bipartisan group consisting of Rep. Ed Markey, D-Mass., Rep. Judy Biggert, R-Ill., and Sens. Byron Dorgan, D-N.D., Lamar Alexander, R-Tenn., and Jeff Merkley, D-Ore. proposed the legislation, which would offer $10B USD in customer incentives to buy EVs and offer money to manufacturers to build charging stations.  

Sen. Byron Dorgan, D-S.D., is one of the main sponsors of the Senate version of the bill.  Surprisingly, no Michigan representatives were involved in the mix.

The Senate version also includes a provision to bump the current tax credit of $7,500 USD for buying an EV up to $10,000 USD.  The House version includes a bump to $9,500 instead, but only if they use $2,000 of the credit to buy and install charging equipment.

The credits would apply to the electric vehicles that are arriving before the year's end.  Nissan is deploying its 2011 Nissan Leaf EV this year in the U.S., but the vehicles have a long pre-order list and are already sold out for the year.  GM will unleash its EV, the 2011 Chevy Volt, in November.

Under the bill, cities could apply to be one of five to eight so-called "deployment communities."  Selecting cities would receive $800M USD to $1B USD to build charging stations for electric vehicles.  The Senate version would offer $250M USD grants to 15 selected municipalities and cities.

Biggert comments, "From plug-in hybrids to all-electric cars, the auto industry is moving quickly to meet consumer demand for more efficient vehicles that cost less to fuel up.  But our electric and transportation infrastructure must keep pace with technology.  [This legislation] will help regional communities establish themselves as models for the development and installation of the next generation of transportation infrastructure, including public charging stations."

A Senate version of the bill offers $1.5B USD for research into batteries, with the goal of producing a battery that can go 500 miles on a single charge.  

Overall, the bill would bump the government's investment in EVs up from $25B USD to $35B USD.  That's not accounting for the currently offered $7,500 tax credit on EVs that could account for a few hundred million dollars in expenses as well.

"There's no chance that the iPhone is going to get any significant market share. No chance." -- Microsoft CEO Steve Ballmer

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