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Rebates, tax credit sweeten electric car deals

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Starting this month, local buyers of new electric vehicles can qualify for up to $5,000 in federal stimulus rebates.

Right now the only car available in the islands that qualifies for that money is the Tesla Roadster, which lists for more than $100,000, but that’s expected to change once the first moderately priced consumer electric vehicles such as the Nissan Leaf arrive in Hawaii early next year.

The rebates, to be distributed by the state, along with a separately available $7,500-per-vehicle federal income tax credit, are meant to spur the early adoption of relatively costly electric vehicles and chargers.

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However, even before the state rebate became available, more than 1,000 people expressed an interest in the Leaf, and about 250 put down a $99 refundable deposit for the car, according to local Nissan dealers. If all those potential buyers follow through and enough vehicles are sold locally, there could be few rebates available for anyone getting in line now to buy the cars.

The anticipated popularity of electric vehicles also raises questions about whether it’s wise for Hawaii to use $1 million in federal stimulus money to provide an estimated 200 buyers with rebates.

"The fact that there is a waiting list means that you don’t need an incentive," said Lowell Kalapa, president of the nonprofit Tax Foundation of Hawaii. "It just doesn’t make a lot of sense."

Among those who have placed a $99 deposit on a Leaf is state Rep. Mark Takai (D, Newtown-Pearl City). The rebate was key to Takai’s decision to buy one of the vehicles.

"There are people out there that don’t need the state incentive, but there are people who need it — people like me that probably wouldn’t be able to afford it without the grant," he said.

Rebates also were needed to show the state’s commitment to electric vehicles so that manufacturers would sell them locally, said Ted Peck, energy administrator for the Department of Business, Economic Development and Tourism, which is administering the rebates.

Hawaii and communities in Oregon, California, Tennessee and Georgia are the initial markets for the five-door Nissan hatchbacks, which are powered by lithium-ion batteries that have enough juice to go 100 miles before needing a recharge.

Nissan’s strategy is to introduce the Leaf in a few places initially and add more as production ramps up over the first year. The company won’t say exactly how many Leafs will be allocated to Hawaii Nissan dealers; however, demand for could outstrip supply in the near term.

The $1 million in rebate money came from energy-related funds provided to Hawaii under the federal economic stimulus program. The state decided to use stimulus money for the rebates as part of a clean-energy initiative.

The rebates can be used on highway-capable electric or plug-in hybrid electric vehicles and to buy and install a residential vehicle-charging system.

Electric vehicle buyers must take ownership and register the cars before getting the rebates.

The Leaf is expected to be the first electric vehicle to arrive in volume in Hawaii. It is expected to cost $33,720 without taxes, title, residential charger and other miscellaneous charges. The price drops to $26,220 after the federal income tax credit is applied and falls to $21,720 after the $4,500 local rebate. Another $500 in rebates are available for each residential vehicle-charger installation.

The Leaf will be sold at a fair margin that won’t be significantly more than the manufacturer’s suggested retail price, said Ron Hansen, chief operating officer for King Windward Nissan.

"The goal is to get these vehicle into the marketplace so the can start having a positive effect" by reducing emissions and oil consumption, Hansen said.


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