(Photo by drp on Flickr)
The Michigan State Legislature passed House Bill 6611 on December 19, 2008 to create the Michigan Advanced Battery Credits program. This program was designed by House and Senate members to keep Michigan as the center of the American auto industry as we move away from gas guzzlers toward greener transportation. Michigan Advanced Battery Credits will provide tax incentives to automakers and parts manufacturers who focus on lithium-ion batteries, all-electric drivetrains and other green vehicle technology. The first recipient of Michigan Advanced Battery Credits is Ford Motor Company, which will receive $55 million in tax credits as approved by the governing Michigan Economic Growth Authority.
Governor Jennifer Granholm announced Ford’s $55 million tax incentives last week to mix some good news with the bad. Chrysler and General Motors are looking for a combined $20 billion in additional loans from the federal government. Ford’s competitors have received assistance from state and federal governments but will shed thousands of jobs and several models in the next few years to stay afloat. The hope is that the Michigan Advanced Battery Credits will help Ford advance its plans for hybrid, battery-electric and all-electric vehicles.
We mentioned Ford’s green vehicle plans last week in referencing the 2010 release of the Transit Connect commercial van. Ford will use the $55 million incentive to free up money for a battery-electric car by 2011 and a new line of hybrids for 2012. Michigan may be taking the right approach in helping out the Big Three, offering a reduction in the corporate tax burden rather than handing out the political poison pill that is a government loan.
The size of the Michigan Advanced Battery Credit given to Ford pales compared to GM and Chrysler’s requests but it may make a real difference. GM and Chrysler are in dire straits compared to Ford due to their unimaginative vehicle lines, poor business models and repeated public relations failures. While Ford has been lumped in with its fellow American automakers, it seems like the frontrunner to emerge from the economic crisis as a global competitor. In order to surmount the considerable odds against American automakers, Ford has to take advantage of this tax credit to create advanced batteries and efficient drivetrains. A full-scale commitment by Ford to advanced battery technology will not only create better cars but will generate goodwill from the consuming public.
