Hello answers_needed-ga:
The US government has shifted from a policy of incentives for
manufacturers, to a policy of regulatory requirement. That is, they
are now requiring automobile manufacturers to meet ever increasing
Corporate Average Fuel Economy standards (CAFE) that essentially force
the manufacturers to seek out electric and hybrid vehicle solutions.
At the same time, the US government has established monetary
incentives for both consumer and business buyers of new vehicles, to
encourage adoption of hybrid and alternative-fuel vehicles. These
incentives range from sales tax rebates/exemptions, to income tax
deductions.
To summarize the answers to your questions:
Specific incentives for manufacturers:
--------------------------------------
- hybrid vehicles count as part of a manufacturer's overall Corporate
Average Fuel Economy (CAFE) mix, helping manufacturers to avoid
penalties for not meeting their CAFE commitment.
Reward system for selling HEVs:
-------------------------------
- again, the reward for manufacturers in selling hybrid vehicles is in
meeting their CAFE numbers. As a result, the price charged by the
manufacturers does not necessarily reflect the true cost of
manufacturing the vehicles; for the most part, the R&D costs have been
absorbed by the manufacturers and not reflected in the pricing of the
end products, and heavy subsidies for components such as batteries
helps to keep the price down for the buyer.
Tax Benefit to encourage production:
------------------------------------
- while there is no specific tax benefit for the manufacturers to
produce a hybrid vehicle, there is indeed a financial incentive; the
CAFE 'savings' from producing/selling a hybrid vehicle will allow them
to sell another higher-profit-margin vehicle such as a luxury
full-size vehicle.
US government incentives:
-------------------------
- both the federal government, and the state governments, provide tax
incentives to buyers of hybrid vehicles. The IRS allows a one-time
income tax deduction, whie many states provide sales tax
exemptions/rebates.
================================================
For the details behind this, please review the following websites for
information that answers your question as well as provides background
info on the history of hybrid vehicle development:
------------------------------------------------
FuelEconomy.gov (US Dept. of Energy)
- use links on left to see all information
News and Information about Hybrid Vehicles
http://www.fueleconomy.gov/feg/hybrid_news.shtml
Compare Hybrid Vehicles Side-by-Side
http://www.fueleconomy.gov/feg/hybrid_sbs.shtml
How Hybrids Work
http://www.fueleconomy.gov/feg/hybridtech.shtml
Tax Incentives for Hybrid Vehicles
http://www.fueleconomy.gov/feg/tax_hybrid.shtml
Links to more Hybrid Vehicle Info
http://www.fueleconomy.gov/feg/hybrid_links.shtml
------------------------------------------------
Hybrid Vehicles, Office of Transportation Technologies - DOE
http://www.ott.doe.gov/hev/hev.html
- provides details on current federal tax incentives for purchasers
of hybrid vehicles
------------------------------------------------
DriveClean.CA.gov - California Air Resources Board
http://www.driveclean.ca.gov/en/gv/home/index.asp
- the CARB is the leader in the USA for establishing policies to
incent and drive the development and adoption of 'cleaner' vehicles
including hybrid ones
Hybrid Vehicle Information
http://www.driveclean.ca.gov/en/gv/driveclean/vtype_hybrid.asp
Incentives
http://www.driveclean.ca.gov/en/gv/incentives/index.asp
(select Hybrid Vehicles from pull-down list)
2003 Zero Emission Vehicle Program Activities
http://www.arb.ca.gov/msprog/zevprog/zevregs/zevregs.htm
------------------------------------------------
Incentives - Clean Communities of Western New York Inc.
http://www.cleancommunitiesofwny.org/incentive.htm
- provides information regarding State of New York regulatory
requirements for auto manufacturers offering automobiles for sale
within the state:
---
"New York's Zero Emission Vehicle (ZEV) Mandate requires each auto
manufacturer's sales fleet of passenger cars and light-duty trucks
(weighing from 0-3,750 lbs.), produced and delivered for sale in New
York, be at least 10% ZEVs starting in 2005. An alternative compliance
program has been instituted to expand the options automakers have to
meet the ZEV mandate. Under this program, automakers must make the
following commitments:
By model year 2004, at least 10% of all vehicles sold must be partial
ZEV or better;
By model year 2005, 9% of vehicles would be partial ZEV and 1% would
be advanced technology partial ZEV (ATPZEV), such as HEVs, which use
alternative fuels and/or electric drives;
By model year 2006, 7% of vehicles would be partial ZEV, 2% ATPZEV and
1% ZEV, which could be battery-electric or fuel cell vehicles; and
Any ZEV or partial ZEV models available in California also would have
to be available in New York State.
(Reference 6 NYCRR Part 218)"
---
The reference to the NY regulations can be found here under part 218:
http://www.dec.state.ny.us/website/regs/ch3.htm
Many of the more-populous states have passed or are considering
similar changes to their environmental regulations, to follow the
example established by California.
------------------------------------------------
Federal Tax Incentives for electric, hybrid cars - Oregon Department of Energy
http://www.energy.state.or.us/trans/fedcredit.htm
- this website for Oregon summarizes the federal tax credits
available to purchasers as well as some state incentives
------------------------------------------------
Government Activities - Electric Drive Transportation Association
http://capwiz.com/evaa/home/
Federal Laws
http://www.electricdrive.org/gov/gov_federal_laws.htm
State Laws
http://www.electricdrive.org/gov/gov_state_laws.htm
- while the EDTA focuses on electric drive vehicles in general, their
mandate includes hybrid vehicles featuring electric drive.
------------------------------------------------
The CLEAR Act - Union of Concerned Scientists
http://www.ucsusa.org/clean_vehicles/advanced_vehicles/page.cfm?pageID=1143
================================================
Please let me know if you would like part of this Answer clarified,
using the 'Request Clarification' button above.
Regards,
aht-ga
Google Answers Researcher |
Clarification of Answer by
aht-ga
on
22 Feb 2004 01:27 PST
If you refer to the detailed description on these webpages, you will
see how the CAFE requirements work:
http://www.ita.doc.gov/td/auto/cafe.html
http://www.nhtsa.dot.gov/cars/rules/cafe/overview.htm
The financial benefit that the manufacturers receive, is the benefit
of NOT having to pay any of the penalties described on those pages for
missing their CAFE requirement. While hybrid vehicles contribute only
a minor assistance to the goal of reaching the CAFE targets (current
gasoline-powered low-emission vehicle designs are quite good at
meeting the targets on their own), the increasing fuel-economy
requirements of the next few years will force manufacturers to
manufacture more hybrid and alternative fuel vehicles in order to
continue meeting the CAFE targets.
There are no direct tax benefits for the manufacturers as a result of
manufacturing hybrid vehicles. The only tax benefit that you can
indirectly link to this activity would be some tax credits granted for
research and development activities in the years prior to a hybrid
vehicle being developed.
As for revenue benefits, the revenue benefits are solely the revenue
made by selling the vehicles. Revenue is the amount of money received
before expenses are deducted, so the selling prices of the vehicles
represents the revenue. Whether or not the manufacturers are actually
making any profit is highly debatable, since no one other than the
manufacturers themselves can know what the true cost of making a
hybrid vehicle is after all R&D activity is accounted for.
Finally, you ask about depreciation benefits. Depreciation is simply
an accounting exercise to account for the gradual decline of an asset.
If the hybrid vehicles are sold or leased to the buyer, then there is
no depreciation benefit to the manufacturers whatsoever, since they do
not own the asset. Only if the manufacturers were renting out the
vehicles would they continue to be regarded as the owner of the
vehicle, and as such would be able to claim the depreciation of the
asset on their balance sheets. Depreciation in and of itself does not
result in a tangible financial benefit.
I can summarize all of this by saying that manufacturers are
developing and selling hybrid cars primarily because the federal and
state governments are telling them to do so, or face the possibility
of no longer being allowed to sell any products in the US. Sure,
there's some amount of corporate citizenship involved ("doing the
right thing for the environment"), but for the most part, it is simply
a way to stay in business.
Does this help clarify things for you?
aht-ga
Google Answers Researcher
|
