About that Volt Planetary Gear Flap: A Correction

by Henry Payne

Detroit – Last week, I reported that the media dust-up over whether the Chevy Volt is an EREV (extended range electric vehicle) or a series hybrid mattered because it was the difference between  a $7,500 tax credit — or just $2,500 per Volt sold. I stand corrected.

The tax credit is determined — not by drive-train — but by battery size. To quote the federal legislation itself:

Section 30D provides for a credit for certain new qualified plug-in electric drive motor vehicles. The credit is equal to the sum of: (1) $2,500, plus (2) for a vehicle which draws propulsion energy from a battery with at least 5 kilowatt hours of capacity, plus an additional $417, and $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours. Under § 30D(b)(3), that portion of the credit determined by battery capacity cannot exceed $5,000. Therefore, the total amount of the credit allowed for a vehicle is limited to $7,500.

Your federal government at work. At 16 kilowatt hours, the Volt’s battery qualifies.

Which is why those wealthy California greens will get $7,500 off their new green status symbol. And therein is the real reason GM badly wanted to designate the Volt an EREV (even though it really operates more like a series hybrid).

“They did not want to be painted with the same brush,” says Ward’s auto analyst Bill Visnic. Because if Leo diCaprio wants a new green status symbol, he wants something that is “different” than his hybrid Prius. Though U.S. taxpayers will not be amused to learn that subsidizing Leo’s new toy will cost them $5 grand more than the Toyota.

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