According to GM-Volt.com, along with the $700 Billion Wall Street bailout bill, several congressional riders were added which give tax credits to buyers of plug-in electric vehicles.

It provides a base of $2500 plus an additional $417 per kwh for batteries greater than 4 kwh. For the Chevy Volt, that works out to $7500 per car, a number GM had lobbied for.

As a lot of you may know, tax credits were issued when the Prius first came out, and they were very well received by consumers. The incentives on that package officially ran out last year, but the new rider should pick up where that one left off, seeing as both GM and Toyota are planning on releasing plug-in versions of their popular technology in the next few years.

Some interesting facts for comparison:

Volt: ($35,000 - $7,500 in tax credits)
Range / Efficiency - 8 kWh / 40 miles (before gasoline starts, going
to and from work this should be sufficient)
Cost - $0.08 / kWh
Yearly mileage you drive - 20,000 mi (Assume 4000 mi you have the
gasoline engine on @ 25 mpg)
Gasoline Consumption - 160 gallons
Gasoline Cost - $4 / gallon
Total yearly cost - $256 (Electricity) + $640 (Gasoline) = $896 / yr

Toyota Camry Hybrid(current model): ($26,000)
Range / Efficiency - 34 mpg
Yearly mileage you drive - 20,000 mi
Gasoline Consumption - 588 gallons
Gasoline Cost - $4 / gallon
Total yearly cost - $2352 / yr

A person will save $1456 / yr in fuel by driving a volt as opposed to
a toyota hybrid. Assume you keep the car for 100k mi / 5 yrs and your
savings have more than paid for the difference ($7280 in total
savings).

Granted, Toyota will have competing technology with their release of plug-in hybrids, but at $27,500, the Volt does look like a reasonable entry level vehicle for drivers desiring that extra green mile and should do quite well with consumers.

More importantly however, is the support that the government has put behind this technology, since early adoption is key to establishing these types of vehicles in the mainstream, programs such as the tax credit give consumers some incentives to buy. With the higher entry level price of this technology, it’s difficult to believe that just anyone will switch from the lower cost fuel efficient combustion models without some kind of incentives in place. With the government looking to have emmissions cut by 40% by the year 2020, the more early adopters, the better.

Along With Wall Street Bailout, Plug-in Car Tax Credit is Passed: Chevy Volt Now $7500 Less