The recently enacted “American Recovery and Reinvestment Act of 2009” (the 2009 economic stimulus act) provides changes to the previously-existing plug-in electric vehicle tax credit. While the changes are perhaps not of immediate concern, since the plug-in electric vehicles covered by the credit are still a couple of years away from reaching showrooms, the credit may affect your car-buying plans in the future.

Under the plug-in electric drive motor vehicle credit program, which was established last year, the base amount of the credit is $2,500, plus another $417 for each kilowatt hour of battery capacity in excess of four kilowatt hours. (By way of comparison, the current Toyota Prius stores 1.3 kilowatt hours.) The maximum credit for qualified vehicles weighing 10,000 pounds or less is $7,500. (Thus, a light-duty vehicle with a 16-kilowatt hour battery pack, such as the prospective Chevrolet Vol, would get the maximum credit, which may help ease the burden of the expected steep sticker prices of plug-in electric vehicles.) This maximum amount increases to $10,000 for vehicles weighing more than 10,000 pounds but not more than 14,000 pounds, to $12,500 for vehicles weighing more than 14,000 pounds but not more than 26,000 pounds, and to $15,000 for vehicles weighing more than 26,000 pounds. Once a total of 250,000 credit eligible vehicles had been sold for use in the United States, the credit was to be phased out over four calendar quarters.

The new law makes the following changes: (1) the maximum credit is limited to $7,500 regardless of vehicle weight, (2) the credit is eliminated for plug-in vehicles weighing 14,000 pounds or more, and (3) the 250,000 total plug-in vehicle imitation is replaced with a 200,000 plug-in vehicle per manufacturer limitation. These changes are effective for vehicles acquired after December 31, 2009.

Note that the new law provides a separate credit for certain low-speed and 2- or 3-wheeled plug-in vehicles, as well as a credit for certain costs of converting vehicles to plug-in vehicles.

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