GOP lawmaker and Chevy dealer looks to end Volt tax credit

Rep. Mike Kelly (R-Pa.), who made his living selling Chevys at a dealership founded by his father, last week introduced legislation that would end the $7,500 tax credit for people who purchase plug-in electric cars like GM's Chevy Volt.

"This is not to say I don't support the development of electric cars," Kelly said in December. "I do, but not at taxpayer expense."

Kelly's bill, H.R. 3768, is largely a response to the poor market showing of the Volt and other electric cars. Kelly, who has served on the board of the Chevrolet Dealers Advertising Association, said in a December op-ed for USA Today that GM is selling Volts in the hundreds each month, compared to the thousands of sales of other models, which shows a "lack of mainstream market demand."

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He also said the Obama administration is to blame for blowing federal funds on a car no one wants.

"The misuse of taxpayer dollars to promote the electric vehicle is emblematic of the Obama administration's overall misunderstanding, and ultimate manipulation, of the free market principles that undergird our economy," he said. "President Obama has become the 'Venture Capitalist in Chief,' gambling hard-earned taxpayer dollars in green projects and industries that are more politically than performance driven."

Kelly also argues that electric plug-in cars are generally more expensive and thus bought by high income households, and that given the fiscal crisis, now is not the time to be subsidizing these upper income purchases.

In his December op-ed, Kelly said the $7,500 tax credit is "largely going to the affluent few who can actually afford to buy an electric car, which costs anywhere between $40,000 (Chevy Volt) to $97,000 (Fisker's Karma)."

Kelly has hammered GM in the last few weeks, after GM offered to buy back Chevy Volts from consumers who may be worried about the fire risk posed by the Volt's battery. The National Highway Traffic Safety Administration (NHTSA) is investigating this fire risk after the agency reported that a Volt's battery caught fire weeks after it underwent a government crash test.

In early December, Kelly wrote a letter to GM asking for more information about the safety of the GM Volt, and questioning why GM did not disclose this fire risk back in May.

"We are not going to be satisfied until we have a better sense of what caused these fires and the safety implications of this new battery technology that is being subsidized by the taxpayer," Kelly said in December. "GM's unprecedented decision to buy back the more than 5,000 Volts out on the road today demonstrates the serious nature of the investigation that NHTSA has launched, and the investigation that the House Oversight and Government Reform Committee will continue to pursue."

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