A little noticed part of the giant $750 billion economic bailout package passed recently to shore up banks by allowing taxpayers to buy up bad loans and bank stock is a provision promoting electric cars. Make that plug-in hybrid vehicles, including the Chevrolet Volt. 

Under the provision, buyers of the Volt would receive a tax credit of $7,504, the highest available on a car. The new law gives higher tax credits for cars with bigger batteries. In effect, these batteries would be too large to be charged just by an onboard engine in a traditional hybrid and would have to be plugged in to recharge. So far General Motors and Toyota are the only automakers that have announced plans to produce plug-in hybrid vehicles in the near future. However, pure electric cars that run on batteries would also qualify, such as the Tesla Roadster, and small electric commuter vehicles.

General Motors had been lobbying Congress for higher tax credits on the Volt, claiming that its large, advanced battery pack would push the price of the car beyond the reach of average consumers.

In June, General Motors Vice Chairman of Global Product Development Bob Lutz said the Volt  would have to cost $40,000 for GM to break even on the car.

Earlier, the company indicated a target price for the Volt of around $30,000 to make it competitive with other high-priced small sedans. The $7,500 tax credit could go a long way toward making the Volt affordable for consumers.

-- Eric Evarts

Edited 10/24/08