Support builds for hybrid tax perk

Congress warms up to 35% tax break for turning cars into plug-ins, though it nullifies the warranty.

David Shepardson / Detroit News Washington Bureau

WASHINGTON -- Support is growing in Congress for tax breaks for hybrid owners who convert their vehicles to plug-ins, even though doing that invalidates the manufacturer's warranty.

U.S. Rep. Ed Markey, D-Mass., head of the House global warming committee who's been pushing a 40 percent boost in vehicle mileage standards by 2018, proposed his "Plug-in Hybrid Opportunity Act of 2007" on Wednesday. It would give gasoline-electric hybrid owners a 35 percent tax credit to defray the costs of converting their vehicle to plug-ins.

Last month, similar legislation was proposed in the Senate.

Sens. Maria Cantwell, D-Wash., Orrin Hatch, R-Utah, and Barack Obama, D-Ill., want to offer consumers up to $7,500 in tax credits to convert hybrids to plug-ins. Dubbed the "Fuel Reduction using Electrons to End Dependence On the Mideast Act of 2007," or the FREEDOM Act, it also would give automakers incentives to build plug-in vehicles.

The House Ways and Means Committee also is considering such tax incentives.

Automakers have been critical of the effort. Converting a vehicle not only invalidates the manufacturer's warranty, but also requires the installation of several hundred pounds of batteries and often forces the removal of the spare tire.

Toyota, which has sold 1 million hybrids worldwide, including 750,000 in the United States, over the last decade, said converting a hybrid risks vehicle fires, and actually increases greenhouse gas emissions.

Charles Ing, Toyota's director of governmental affairs, told the Senate that tests of two converted plug-in Toyota Prius vehicles show they had significantly higher emissions of nitrogen oxide.

"This raises the question of whether the government should be paying people to make their cars dirtier," Ing wrote.

But there are many ardent enthusiasts of conversion plug-ins.

Several battery manufacturers, including Watertown, Mass.-based A123, are selling conversion kits for around $10,000.

Markey will hold a hearing and demonstration today with A123's president and CEO, David Vieau. The hearing also will include the mayor of Austin, Texas, and actor Rob Lowe, who supports hybrids.

A Markey spokesman, Eben Burnham-Snyder, said Lowe "had driven a plug-in hybrid and is passionate about the issue."

Automakers were critical of the decision to include Lowe.

"This is a new low in policy making. This is a serious public policy issue potentially impacting millions of jobs, not a Hollywood production," said Charles Territo, spokesman for the Alliance of Automobile Manufacturers, the trade group that represents the Detroit Three, Toyota, and BMW, among other automakers.

Though automakers oppose converting existing hybrids to plug-ins, they are working to develop plug-in technology for the future.