When you saw the headline of a story we ran this week about Waymo working 62,000 Chrysler Pacifica plug-in hybrid minivans into its driverless fleet, you probably said ‘Huh… that’s cool…” and moved right on with your day.
That’s what I did anyway, not giving it a second thought until I came across an interesting take online that suggested that Waymo’s deal with Chrysler might have been a bit more strategic than it feels at first glance – not to mention, it might impact the affordability of electric vehicles for future consumers.
Here’s some quick context: The electric vehicle industry is still so youthful and fresh-faced that the federal government has committed to helping it get off the ground. As carmakers struggle with profitability due to R&D investments and challenges relating to scale, at least they can dangle a carrot in front of potential buyers: each new electric vehicle is eligible for a $7,500 tax credit, and that includes hybrid-electrics like the Pacifica plug-in as well.
According to one expert, the tax credits were intended to apply to businesses as well, therefore there’s really nothing preventing Waymo – the self driving car unit owned by Google – from applying for the credit on the full fleet, which would result in a $465 million credit on this year’s taxes.
Good for Chrysler; good for Waymo; great idea! But here’s the rub. The tax credits were designed to be phased out once certain volumes of sales were reached, so once an automaker reaches 200,000 eligible models sold, the credit begins to evaporate. So unfortunately for future buyers of Chrysler plug-ins, Waymo just ate up about a third of that, and it appears the 200,000 vehicle cap exists whether or not Chrysler intends to apply for the credit or not.
There’s an upside however, according to Genevieve Cullen, president of the Electric Drive Transportation Association, who told Jalopnik that mass orders like Waymo’s help fuel economies of scale, meaning the long term benefits of cheaper production will benefit EV buyers in the end anyway. Hopefully by that she means with a cheaper purchase price, since the cost of an electric vehicle has actually been rising since 2012.
