ATLANTA (AP) — Georgia's generous $5,000 tax credit for electric vehicles is the target of three separate bills in the state House, including one lawmaker trying to end the write-off altogether.
Two other bills would lower the credit over time and expand the type of vehicles eligible in the meantime — including the plug-in hybrid Chevy Volt or Toyota's line of hybrid cars and SUVs.
The debate in Georgia comes as other states mull credits as a way to boost sales of alternative fuel vehicles with a higher sticker price than traditional cars. The U.S. Energy Department is in the midst of a campaign to make electric vehicles more affordable in the next ten years, with consumer rebates high on the list of strategies.
Each bill before Georgia lawmakers would make significant changes to the write-offs that have been credited with lifting the state to No. 2 in electric vehicle sales, trailing only California in the 2014 tracking by industry analysts at IHS Automotive. The amount of low or zero-emission vehicle credits paid out by the state exploded from about $310,000 in 2011 to about $15.4 million in 2013. Figures for 2014 returns aren't available yet.
Electric vehicles are particularly popular in metro Atlanta, where electric vehicle owners can use highway lanes off-limits to solo drivers in a traditional car and a Nissan dealerships runs regular radio ads claiming best in the nation sales of the plug-in Leaf.
Rep. Chuck Martin, a Republican from Alpharetta, want to end the credits in July. Martin said the incentive has become "an entitlement" and prevents car companies with hybrid and other alternative fuel vehicles from competing in Georgia. He worries a multi-year decrease of the credit will create a rush to buy and inspire a fight when it is scheduled to end.
The credit in 1998 was created before consumer options were widely available, Martin said. But with the introduction of the Leaf in 2011, Nissan was able to take advantage of the mostly dormant perk along with more expensive plug-in electric cars like Tesla. Electric cars are just a fraction of those using the roads in Georgia — about 1.6 percent of new vehicle sales here in 2014 were electric according to IHS.
"When we quit picking winners and losers, Nissan is going to have to sharpen their pencil," Martin said.
Michael Beinenson, who leased his first Leaf in 2013 and recently upgraded to BMW's i3 electric vehicle, isn't so sure. He serves as president of the EV Club of the South, whose members get together regularly to talk electric vehicles, and said almost everyone initially decided to lease based on economics, not the environment.
"Without the credit, I think we'll have a shock in the cycle," Beinenson said.
But supporters concede that the $5,000 figure is too generous. A compromise bill, developed by a coalition of manufacturers, utilities and environmental groups, instead would gradually lower the amount of credit available while expanding the type of cars eligible and end it altogether in 2020. Rep. Ben Harbin, an Evans Republican, is sponsoring that bill. He credits Martin with starting a conversation about the write-offs.
"It's easy to say we just need to end this because one company is taking advantage, but this was started for a reason: To grow this market in Georgia," Harbin said.