Levin Calls for Extension of Hybrid Heavy-Duty Tax Credits

SOUTHFIELD, MI – Congressman Sander Levin (D-MI) is calling for the extension, and doubling, of tax credits regarding hybrid systems for heavy-duty vehicles.

“We must act on it this year,” Levin says here at Eaton Corp.’s campus of the Heavy Duty Hybrid Tax Credit Extension bill he is sponsoring. The proposed legislation is in the U.S. House of Representatives Ways and Means committee.

Dimitri Kazarinoff, vice president and general manager-hybrid power systems for Eaton, says the current credits, which expire this year, have helped sales but the impact has been “somewhat muted” because of the high cost of hybrid heavy-duty vehicles.

Levin’s bill would cover between 20% and 50% of the incremental cost, Eaton, a leading supplier of such systems, says in a statement. The proposed legislation would extend the credits through 2014.

Kazarinoff says the current credits only offset 10% to 30% of the cost of hybrid systems in heavy-duty vehicles.

A vehicle with a gross weight of between 8,500 lbs. and 14,000 lbs. (3,856 kg and 6,350 kg) with a 30% fuel economy increase is eligible for a $1,500 credit under the current law.

Under Levin’s bill, a vehicle in that weight range with the same increase in efficiency is eligible for a $3,000 credit.

Eaton says the credits proposed under Levin’s bill would increase sales of medium- and heavy-duty hybrid vehicle sales from less than 2,000 today to 10,000 by 2014.

President Obama last spring viewed the Eaton-powered Ford F-550 in California.

“Simply putting as few as 10,000 hybrid-electric trucks on the road would reduce diesel fuel use by 7.2 million gallons (27.3 million L) per year and reduce carbon-dioxide emissions by 83,000 tons (75,296 t),” Levin says in a statement.

Levin at Eaton headquarters says his bill has co-sponsors and “will get a lot more” by the time Congress reconvenes next month.

Last week, Eaton announced it would take part in the largest deployment of commercial hybrids to date as part of a $45.4 million plug-in hybrid-electric vehicle grant. The funding is part of the U.S. Department of Energy’s $2.4 billion American Recovery and Reinvestment Act.

Eaton collaborated with both the South Coast Air Quality Management District and the Electrical Power Research Institute on the original proposal, Kazarinoff says.

“We’re going to be doing a system development; we’re going to be sourcing vehicles from Ford (Motor Co.) and then working with a subcontractor of ours, Altec (Industries) to do the system installation,” Kazarinoff tells Ward’s of plan to deploy more than 350 plug-in hybrid commerical vehicles to 50 utility and municipal fleets across the U.S.

The 378 Ford models, which he says are a mix of “trouble trucks and shuttle cutaways,” as well as possibly some heavy-duty Ford pickup trucks, will use plug-in technology based on an existing Eaton architecture.

Batteries for the trucks will come from Compact Power Inc., with Kazarinoff noting battery packaging will be reduced in size from existing battery packs on five Eaton-supplied trucks today. The reduction in size also will “get the cost into the realm of what makes sense,” he says.

Eaton’s electrical group will provide to the municipal and fleet customers 110V or 240V charging stations at their request.

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