Firms Call for Electric Car Tax-Credit

By JUDITH BURNS
WASHINGTON -- A coalition of auto makers, battery manufacturers, utility operators and shipping companies called on Congress to offer tax credits for buying all-electric plug-in vehicles as part of a $128 billion program to get seven million such cars on the road by 2018.
The "cash for volts" approach is part of an effort by the Electrification Coalition, a 13-member group that includes Nissan Motor Corp. and shipping giant FedEx Corp., to campaign for more government support for electric vehicles and the infrastructure needed to make them more appealing to consumers and businesses.
The group outlined a plan to put 100 million electric vehicles on the road by 2030, starting with pilot projects in six to eight U.S. cities. The Obama Administration earlier this year awarded $2.4 billion in grants funded by the economic stimulus program to subsidize development of electric vehicle production in the U.S.
"We're talking about heavy investment" in cars, batteries and supporting technology, said Nissan Motor Co. Chief Executive Carlos Ghosn, a member of the group. Nissan's all-electric vehicles will be sold in the U.S. starting next year. Mr. Ghosn predicts electric vehicles will account for 10% of cars sold by 2020. Hybrid vehicles that mix traditional internal-combustion engines with electric power accounted for just 3% of car sales in 2008.
The group is proposing that residents in test cities who buy electric vehicles be granted tax credits significantly higher than the $7,500 maximum now available. The group also proposes tax credits to fund 50% of the costs to upgrade electric grid facilities and 50% to 75% of the cost to build public charging stations that would allow drivers to charge vehicles on the go, and ease the anxiety about the limited range of today's battery-powered cars.
The tax credits would offset the high costs of electric vehicles and the supporting infrastructure. Auto industry officials worry that unless there is a significant increase in gasoline prices, most consumers won't see the value of expensive electric vehicles that have ranges between refueling stops of 100 miles or less.
The group notes that Japan and the European Union already offer large financial incentives to spur electric vehicle purchases.
"We can set the stage for it, with a wide range of tax credits," said Sen. Byron Dorgan (D., N.D.) who took part in the event.
Write to JUDITH BURNS at judith.burns@dowjones.com