Mar 18, 2009

Stimulus Package Might Stimulate Electric Car Sales

The way the economy is headed, getting an income tax credit might be the last thing on many consumers’ minds. They’re more concerned about having an income in the first place. But the “stimulus bill” President Barack Obama signed into law in mid-February has given new hope to electric carmakers because one of its provisions offers consumers a 10 percent federal income tax credit based on the purchase price of the electric vehicle.

According to the bill, formally known as the American Recovery and Reinvestment Act of 2009 (ARRA), electric-vehicle buyers may qualify for the federal tax credit, whether the cars are purchased for personal or business use. Taxpayers need to talk to their personal tax advisors for guidance on their specific situations. Any tax benefit from the tax credit for a qualifying 2009 electric-vehicle purchase will not be finalized until their 2009 federal income tax return is processed. Per the ARRA 2009, the federal tax credit applies to purchases from Feb. 17, 2009, until Dec. 31, 2011, but Congress may change or rescind the incentive at any point. (You know how they are.)

“This is a win-win-win for today’s GEM car buyers, for the environment and for the country,” said Rick Kasper, president and COO of the electric-car manufacturer. “People who buy GEM cars today will really benefit in many ways. This tax credit may save qualifying buyers between $700 and $1,500, depending upon which of our six GEM models they buy and their specific tax situation.”

While electric vehicles like the GEM cars are gaining popularity, they are not likely to replace your family car yet. They are classified as low-speed vehicles (“neighborhood electric vehicles”), offer a top speed of just 25 miles per hour and have a range of just 30 miles on a charge. They are street-legal in nearly all 50 states but only if driven on public roads posted at 35 mph or less.