MNN - Mother Nature Network

 

Psst, wanna buy an electric car? Well, buy it in [insert name of state here] because our subsidies are better than everyone else’s.

 

It hasn’t quite gotten to this point yet, but it’s getting there. California is definitely still in the lead, since it offers $5,000 cash rebates, the possibility of an entirely free $2,000 EV charger, plenty of car availability, and such perks as the ability to wave off the congestion in the all-important HOV lanes.

 

Other states with various types of EV subsidies include Georgia, Hawaii, Oregon, Washington, Maryland and South Carolina.

 

But here comes a dark horse state, Tennessee, which has a few advantages, too. Nashville, in addition to pumping out slick country music, is also the future home of the Nissan Leaf factory (in 2012). And Chattanooga, with a new state-of-the-art VW plant also has some of the world’s fastest Internet service, so interacting wirelessly with the smart grid there should be a no-brainer. Tennessee is an early launch state for the Nissan Leaf, and 1,000 cars are on their way. And with ECOtality it is partnered in The EV Project, which will put some free electric vehicle chargers on the road.

 

Phil Bredesen, the lame-duck governor, just announced that the first 1,000 customers buying a Nissan Leaf in Tennessee will get a $2,500 rebate. This is not a tax credit, as was erroneously reported in some of our leading journals. Tennessee doesn’t have an income tax. It’s a cash rebate.

 

Add the $2,500 subsidy to the $7,500 federal tax credit (everyone gets that) and a Leaf is yours for just $22,780 (compared to the $32,780 sticker). But you need to live in Tennessee, home of the Grand Old Opry and the Tennessee Valley Authority or TVA.

 

I was in Tennessee twice this year, visiting Chattanooga, where I saw the huge new Volkswagen plant going in and companies are producing a great deal of clean-tech, and Nashville, where Nissan broke ground for a federally supported Leaf lithium-ion battery plant. This is a state that gets it when it comes to electric vehicle, and green technology in general.

 

Michael Drescher, the governor’s communications director, told me, “The subsidy is something we’ve been talking about for a while, in part because we do a lot with clean energy and fuels, and in part because Nissan is here and will build the Leaf in Nashville. As a state, we’re naturally inclined to venture into early-stage technology. We don’t have income tax here, so it had to be in the form of a rebate.”

 

The long-term health of the California rebate is threatened by the state’s perilous financial state, and something similar prevails in Tennessee. The subsidy is only for the first 1,000 cars, so it’s an open question if it will be extended by the next governor. “It will be someone else’s decision to make,” Drescher said. “But the concept has broad support here.”

 

The state isn’t going to hand out cash: The subsidies will go to Nissan dealers, who will lower the invoice price on the Leafs. It seems to me that Tennessee could also apply its rebates to other cars, like the forthcoming Chevrolet Volt, but it seems to be just for the Leaf.

 

Dave Vieau is among the non-Tennessee residents applauding the idea. Vieau heads A123 Systems, a lithium-ion battery company that this week opened the largest EV battery plant in North America (it’s in Livonia, Mich.) A123 got both federal and state subsidies to locate in Michigan. “It’s really important for the states and the federal government to step up,” he said Monday. “Tennessee has strong reasons to be subsidizing EVs, including the fact that the Leaf will be built there. This isn’t the time to be backing off.”

 

A123’s 291,000-square-foot factory would probably be somewhere else, maybe the company’s home base of Massachusetts, if it didn’t get $249 million from the feds and $125 million from the state. But now it can make 30,000 hybrid packs annually. Michigan Gov. Jennifer Granholm says that the 16 advanced electric vehicle battery companies in Michigan could create 62,000 jobs in the next 10 years. And who’s going to sneeze at that, when the state has more than 13 percent unemployment?

 

I'm off to Iceland now, so stay tuned for my reports from there....

 

Related on MNN: How Chattanooga is going green