Green vehicle stimulus unveiled

House Democrats unveiled an $825 billion stimulus bill that includes $3.5 billion to dramatically increase U.S. battery research and speed the adoption of more fuel-efficient vehicles.

The money for advanced battery support includes $2 billion -- half in loans and half in grants -- and $200 million to encourage electric vehicle technologies. The bill also calls for $300 million to retrofit older diesel engines and replace some diesel vehicles, such as school buses, and use $400 million to help state and local governments buy more efficient alternative-fuel vehicles.

Additionally, the measure includes $600 million for the federal government to replace older vehicles with alternative-fuel automobiles.

During his campaign for the Democratic nomination, President-elect Barack Obama called for 1 million electric vehicles to be on the nation's roads by 2015 and urged the federal government to take part.

"As we continue to support the auto industry's efforts to undertake vital restructuring these next months, the federal government must become a much stronger partner to spur the development and manufacturing of advanced battery and other technologies important to producing the cars of the future in the U.S.," said Rep. Sander Levin, D-Royal Oak, adding that the nation has lost 4 million manufacturing jobs since 2001.

The House bill will face changes when the U.S. Senate introduces its own bill, which is expected to shift more of the $2 billion in battery research money to grants not loans.

Automakers should benefit from other provisions, including a $30 billion boost in highway construction spending and at least $31 billion to modernize federal and other public infrastructure projects, which should increase the sale of pickup trucks for work use.

The bill also dedicates $10 billion to mass transit and rail to reduce auto use. Of that, $6 billion will go to local governments to buy buses -- a move that could boost Daimler Buses North America and Ford Motor Co.'s Volvo unit, which produces buses in North America through its Nova Bus subsidiary.

The bill has two other provisions to promote alternative fuels and electric vehicles.

It increases to 50 percent from 30 percent an alternative refueling property tax credit, which could be used for installing rapid recharging units for electric vehicles and E85 pumps.

It also awards $11 billion to improve the electricity grid, a necessary step for the wide-scale adoption of electric vehicles.

General Motors Corp. spokesman Greg Martin praised the support for battery research.

"It's good to see the stimulus bill recognizes that to keep pace in the global technology race, the U.S. must make the capability to produce advance batteries a national, competitive priority," Martin said. "Greater advance battery funding can help jumpstart a green manufacturing sector and get advanced vehicles like the Chevy Volt on the road at greater numbers."

Automakers had hoped to get a second $25 billion included in the stimulus bill for a federal loan program that was approved in September to retool older plants and equip new plants to build advanced vehicles or produce high-tech components, such as batteries and other parts.

Obama in August called for $50 billion for the program, but Congress only approved $25 billion.

More than 70 companies have applied for money under the $25 billion retooling program -- seeking far more than the total, but the Energy Department hasn't awarded any loans yet.

Automakers had also hoped that Congress would have added money to retire older vehicles, known as "Cash for Clunkers." Proponents wanted to give people up to $4,500 to scrap older, less-efficient vehicles in exchange for buying a new one. The move would take dirtier cars off the roads and boost slumping auto sales.

Charles Territo, a spokesman for the Alliance of Automobile Manufacturers, a trade group representing Detroit's Big Three, Toyota Motor Corp., Daimler AG and six others, said the carmakers were disappointed that fleet modernization money wasn't in the bill.

"We remain hopeful that as this process moves forward, consumer incentives that bring car buyers back to dealer showrooms will be included," he said.

You can reach David Shepardson at (202) 662 - 8735 or dshepardson@detnews.com">dshepardson@detnews.com.