Nissan Says It Is Ready For End Of Federal EV Tax Credits

Nissan’s success to date with regard to electric vehicles, and the LEAF in particular, has been notable, and has put the company at the vanguard of the industry. Such a position has its downsides, though, including the fact that the company’s great success means that it’ll be reaching the limit of its qualification for the federal tax credit for electric vehicles (EVs) pretty soon.

To be clear, US federal tax credits for EVs (including plug-in hybrid electric vehicles, or PHEVs) are only fully available for the first 200,000 of these vehicles that any one manufacturer sells. After that, the tax credit is reduced, and at a certain point ceases completely. Nissan is apparently ready for this eventuality, though, based on recent comments.

Considering that the company has already sold roughly a third of that 200,000 unit figure (after just 4 years offering the LEAF, and with sales really picking up in the past year, with 30,000 US sales in 2014), it’s worth noting that Nissan is gearing up for a transition, presuming the tax credit isn’t extended.

Gas2 provides more:

Pierre Loing, Nissan’s North American vice president for product planning, says Nissan will be ready when the rebates on the LEAF end according to Wards Auto. The company expects to remain competitive by increasing the car’s range from 80 miles at present to almost double that, or 150 miles.

There are rumors that Nissan will offer buyers a choice of batteries for the LEAF when the new model appears in 2016 as a 2017 model. Buyers who only need 80 mile range could save money by purchasing the standard battery, while those wanting more range (150 miles or more) could opt for a more powerful battery for more money.

However, Loing says that the cost of batteries has not come down as far or as fast as Nissan thought it would when the LEAF first went on the market. He also says that low gas prices will hinder electric car sales, a statement disputed by Plug In America which says it has found no correlation between gas prices and EV sales over the past four years.

Not sure where I come in on that debate — either way, low gas prices are a short-term issue — give it a year or two and they’ll probably be back where they were last year. After all, the cheapest oil reserves out there (with regard to extraction and development costs) are diminishing fairly rapidly now — what’s left is mostly the relatively expensive stuff. I wouldn’t count on EVs being put at a disadvantage by low gas prices for very long (if at all, as noted by Plug In America). Even Saudi Arabia has now noted that the end of oil is on the horizon — which is probably a good thing considering the potential for extreme climate change and associated wars and mass migrations if oil use continues at pace.

Furthermore, the benefits of electric vehicles go far beyond saving money on gas. Arguably, the biggest consumer draws are actually the great convenience of charging at home (never having to stop at a gas station again) and instant torque (excellent acceleration, which makes merging onto a highway or into a roundabout much easier and safer, while also making driving a lot more fun).

It’s worth noting here that President Obama recently put forward the idea of raising the maximum tax credit for EVs to $10,000 — something that would result in the 200,000-unit figure being reached even sooner than otherwise. Considering the current deadlock between the two main political parties, though, it seems relatively unlikely that this idea will go far.

Image Credit: Nissan Motors