Hybrid incentive hornets nest

As we have said on HybridBlog before, incentives for hybrids and other cleaner, more fuel-efficient technologies can be a good thing as long as the goal is to push the hybrid market in the cleanest, most efficient direction. We have warned against the “one size fits all” approach because the main goal of the incentives is to keep consumers using the best technologies, thereby increasing the likelihood that automakers will use these technologies to keep pushing the emissions and mpg envelope.

First, there was a great article in Roll Call (you’ll need to subscribe to see the full article) about the fracturing in automaker unanimity on Capitol Hill when the president suggested a lifting of the 60,000 vehicle per automaker cap on the federal tax credits. The Big three automakers are a bit peeved at the idea, with one lobbyist likening expanding the credit to “pigs at the trough.” Several automakers that are lagging behind Toyota in hybrid production suggested that the tax credit cap should stay in place no matter how high gas prices went. Toyota was, of course, positive on the plan, but their spokesperson made sure everyone knew that Toyota did NOT initiate the idea. A Honda spokesman, while not thrilled with the credit system in place, was equally displeased at the prospect of being forced into an artificially created disadvantage with the automakers behind their technological curve when Honda’s hit its cap.

As if wrangling over the tax credit wasn’t enough, GM and Ford are now petitioning the federal government to force its vehicles into state HOV exemption programs. Seems that these two automakers are irked that two big hybrid-buying states, New York and California, both have 45mpg qualifiers on their HOV exemption, and think that the federal waiver that gives states the discretion to open up their HOV lanes to vehicles with a 25 percent increase in fuel efficiency in combined city-highway miles over the non-hybrid model means that either you let every vehicle in that meets these qualifications, or none at all.  “It’s discriminating, we think, against a U.S. manufacturer like Ford, which we believe has implemented state-of-the-art technology,” said a Ford representative in Washington. GM has even more nerve, as they actually want their hollow hybrid Greenline Vue to wedge its way into the HOV lane.

The rub on both of these issues is the fact that those automakers complaining about unfair treatment are treating advanced technology incentives as if they were automaker subsidies—they are not. Subsidies are usually put in place to help level a particular playing field. The point of incentives is not to level the playing field, but to move the entire playing field as far forward as possible. To penalize consumers looking to do their part to reduce oil use and global warming pollution by denying them tax credits on the best available technologies, or to penalize states that use their discretion to set higher limits on their HOV waiver to promote higher fuel economy while managing the total number of applicants to reasonable levels undercuts the whole point of both of these programs.

If the automakers want federal subsidies to help them more quickly develop advanced vehicle technologies, be it hybrid, or cleaner diesel, or others, that’s fine, they should lobby for them. It could very well be a viable part of a comprehensive set of clean vehicle solutions. But playing “me too” with incentives intended to best benefit consumers as well as our nation’s environmental and oil security shows how far removed from understanding the needs of the consumer, and of the nation, many of these automakers have become.

Posted by: ScottN

Comments

[George]

Lets not forget the enormous tax deduction on even-more-enormous SUVs. Vehicles over 6000 lbs can be written off when used in a "business". This is a subsidy worth tens of thousands of dollars, aimed at precisely the wrong behavior. I don't hear Detroit complaining about it, though.