President Pushes to Add More Credits for Hybrids

Source: JACKIE CALMES • New York Times  • Posted: Thursday, March 8, 2012

President Obama on Wednesday proposed sweetened tax incentives and subsidies to spur the market for alternative-power cars and trucks, promoting his “all of the above” energy strategy while warning against other politicians’ “quick fixes” to the latest spike in gasoline prices.

Mr. Obama made his fourth trip in less than six months to North Carolina, an election battleground state he won narrowly in 2008, to describe his ideas at the Daimler Trucks North America manufacturing plant near Charlotte. There, he was met with news that his support in the state has inched higher but that more residents still disapprove of how he is handling his job and the economy than approve of it, according to a poll by Elon University and The Charlotte Observer newspaper.

The president called for increasing to $10,000 an existing $7,500 credit per vehicle for consumers and businesses that buy cars and trucks powered by electric battery, natural gas or hydrogen. He would also expand the technologies that qualify and allow buyers to benefit at the time of purchase, by transferring the credit to the dealer or financier.

The credit’s enhanced value would bring the purchase price of alternative-energy vehicles more in line with conventional models, supporters say. Partly because of the vehicles’ costs, sales have been a problem. General Motors announced last week that it was suspending production for five weeks of the Chevrolet Volt, a plug-in hybrid that Mr. Obama has promoted in the past. On Wednesday, he did not mention his goal of having one million electric vehicles on the nation’s roads in 2015.

Mr. Obama also proposed a new five-year tax break for those who buy commercial trucks that run on electricity or natural gas. Purchasers would get to reduce their tax liability by an amount equal to half the price difference between an alternative-power truck and a similar, lower-priced conventional vehicle.

He also said he would seek Congress’s approval for $1 billion to award up to 15 cities that provide the infrastructure needed for alternative-power vehicles, like battery-charging stations, and $650 million for a research program to increase the range and decrease the price of alternative-power vehicles.

To offset the cost of his proposals, Mr. Obama proposed a familiar source: repeal of $4 billion in annual tax incentives for oil and gas companies. While Republicans and some energy-state Democrats routinely oppose the idea, Mr. Obama told his receptive audience of plant managers and union workers to urge their representatives in Congress to support it.

“It’s time to end that taxpayer giveaway to an industry that’s never been more profitable, invest in clean energy that’s never been more promising,” he said.

With polls showing increased voter concern with pump prices, in Washington aides to Speaker John A. Boehner circulated an e-mail to reporters quoting headlines from Charlotte about rising prices there. Republican presidential candidates also have assailed Mr. Obama as discouraging oil production, and one, Newt Gingrich, promises $2.50-a-gallon gasoline.

But Mr. Obama used his speech to rebut the Republican attacks, citing statistics showing increases in oil production, acres under exploration and pipeline permits during his administration. He blamed world markets roiled by instability in the Middle East, and market speculation, for higher gasoline prices.

“The next time you hear some politician trotting out some three-point plan for $2 gas, you let them know, we know better,” he said. “Tell them we’re tired of hearing phony election-year promises that never come about.”