Oklahoma LSV Tax Credit Update

Yesterday a county judge in Oklahoma ruled in favor of vehicle purchasers, declaring that they could receive the state tax credit for the LSVs that they purchased.  The lawsuit was brought by Ada Electric Cars and H20 Sports Unlimited and other dealers joined as well including GKU Electric Vehicles LLC, Heartland Outdoors LLC, Pat’s Archery Inc., and Xtreme Cycle and ATV LLC.

The judge’s order states low-speed vehicles sold by manufacturers Tomberlin, Ruff & Tuff, Stealth, Fairplay and Bad Boy Buggie qualify for a state tax credit.  The order also includes, “any other low speed vehicles similarly equipped as those described above qualify for … ‘ the state tax credit. Specific models noted in the order include Tomberlin E-Merge E-2, Tomberlin E-Merge E-4, Tomberlin Anvil, Tomberlin E-Merge Classic, Ruff & Tuff NEV2, Ruff & Tuff NEV4, Ruff & Tuff Cruiser EV2, Ruff & Tuff Cruiser LX2, Ruff & Tuff Cruiser LX4, Ruff & Tuff Hunter 4×4, Stealth Patriot LSV, Stealth Patriot LSV 4 X 4, Fairplay EVE, Fairplay Goat and Bad Boy Buggie XT LSV.

The Oklahoma State Tax Commission responded to the announcement by stating that it would appeal the ruling.  The commission stated that the tax credits could cost the state more $40 million.  If this is true, at the high end an average tax credit of $8,000 per vehicle translates into 5,000 vehicles sold in the state and at the low end an average tax credit $4,000 per vehicle translates into 10,000 vehicles sold in the state. In either case the figures represent an enormous boost to the LSV market. – Marc Cesare

Learn more:  Enidnews.com Stilwater-newspress.com

Enidnews.com

Electric Utility Vehicles Showing Strong Growth

Despite the economic downturn the market for off-road electric utility vehicles, especially for hunters, is experiencing strong growth.  A recent story about Stealth Manufacturing reports that in 2008 the company sold 600 vehicles, five times the sales management expected.  Demand has continued to be strong in 2009 with management reporting that their

..entire production is sold out through Dec. 31.  We’ve outrun virtually every supplier we have.

Part of the growth of the Louisiana based company is attributed to their television sponsorship program with Primos Hunting Products. Stealth produces the Predator XR, Apache XR and the “Izzy” an industrial vehicle.  They are also planning to launch the Patriot LSV which went into production last week.  The company employs 38 people in a 82,000 square foot facility and is looking to expand their distribution beyond the current 70 dealers and distributors in 28 states. On the horizon is a new vehicle about which the CEO Bill Krutzer states

It’s probably going to change the complexion of the electric vehicle industry, and we’re testing it right now.  It’s a completely different electrical platform. We’re going to bring some pretty sophisticated technology to the game, and we’re not going to do anything but improve the price.

Learn more:  Thenewstar.com

Stealth Manufacturing is not the only electric utility vehicle manufacturer with a positive outlook.  The leader in the electric utility vehicle market for hunters,  Bad Boy Buggies, is expected to reach sales of $17 million this year, up from 2008, but down from a peak in 2007 of $20 million.  Despite a recent recall of their standard model the company is reports that their new XT model has been well received. They are also launching an LSV model and have had success selling their utility vehicles outside the hunting market.  A key marketing effort for them is teaming up with Bass Pro Shops which is running a test campaign in five markets.

Learn more:  Natchezdemocrat.com

A few weeks ago I had the opportunity to talk with Eric Burns of Bad Boy Buggies. He talked about some of their improvements in their new XT model which at the time had a waiting list of customers.  The improvements include:

• An independent suspension for better performance and comfort in extreme conditions and/or extended operating times
• Better turning radius
• Re-routing of electrical cables to protect them from the elements
• Improved distribution of battery weight that impacts performance on  steep climbs
• General improvements to the construction and design of the vehicle

Some of the non-hunting markets they are looking for gains in include agriculture such as dairy farms, government fleets and construction.  Burns noted that in some of these environments the electric utility vehicle allows an operator to more easily hear other vehicles in the work area, use walkie talkies or other communication devices without turning off the engine and avoid the necessity of storing fuel on site.  Key obstacles for electric utility buyers are battery replacement costs and the range of the vehicle, which in many instances may be a perceived issue rather than actual. Bad Boy Buggies is looking to expand their distribution network in the Western US from their current strongholds in the South, Southwest and Midwest, usually centered around hunting communities.

Additional signs of strength in the electric utility vehicle market include the recent entry of Polaris, the utility vehicle market leader, and Tomberlin’s plans to launch their electric utility vehicle, the Vanish.

On a related note, the fact that both Stealth and Bad Boy Buggies are coming out with LSV versions indicates an interesting sub-segment is developing in the LSV market.  Rather than vehicles that are primarily or exclusively used on-road, another segment of users that need a mix of off-road/rough terrain capabilities and public road access is emerging.  Burns of Bad Boy Buggies noted military bases, farms and college campuses as potential buyers of these street legal UTVs. - Marc Cesare

Federal Tax Credit Appears To Be Significantly Boosting LSV Sales

Based on stories from around the country, the federal tax credit for new plug-in electric vehicles purchased during 2009 is providing a significant boost to LSV sales. The tax credit is included as part of the Emergency Economic Stabilization Act (EESA) and is credit of $2,500 to $7,500 for a four wheeled vehicle that draws propulsion using a rechargeable battery with at least four kilowatt hours of capacity. The base credit is $2,500 and increases depending on the size of the battery pack.  An additional $417 is added for each kilowatt hour above four kilowatts hours.  For many LSV this equates to a tax credit of roughly $4,000 to $6,000 depending on the brand of LSV and the battery pack option chosen.

A Tomberlin dealer in Oklahoma has reported a “dramatic” increase in sales, Bad Boy Buggies is hoping to launch their street legal vehicle shortly to take advantage of the tax credit fueled demand and in a recent story out of South Carolina a dealer reported a sales jump from 10 to 60 vehicles per month because of the tax credit.  South Carolina adds a state tax credit equal to 20% of the federal tax credit and Oklahoma adds a 50% tax credit for electric vehicles.  In addition, the major LSV manufacturers are all prominently touting the tax credit on their websites, often with the specific tax credit available for each model.  Learn more:  SCNow.com

Tax Credit Update

Previously I posted a story about GEM stating their vehicles qualified for a federal plug-in electric vehicle tax credit. I have since checked on other manufacturers such as Tomberlin, Columbia ParCar and Wheego and they are also claiming their LSVs qualify for the tax credit as well. Columbia ParCar’s website has some good information on the subject. LSVs are apparently eligible for two tax credits in 2009, the larger EESA or plug-in tax credit and the smaller ARRA LSV tax credit, but taxpayers can only claim one for a given vehicle. The EESA tax credit should provide a significant boost to sales of LSVs for the remainder of 2009.

Tomberlin Anvil Production to Begin Next Month

Tomberlin management recently announced that production of their Anvil LSV will begin at the end of July.  Executives are promoting the vehicle this week with an appearance Monday morning on CBS’ Early Show.  The Anvil is targeted for planned communities and urban/suburban short-distance trips.  Learn more:  Augustachronicle.com

Road Use Regulation Round Up

Ocean City, NJ – Police urge city council to keep golf cars off city streets for safety reasons.

West Baraboo, WI - Passes ordinance allowing NEVs on low speed streets and certain crossings of state highway.

Charleston, NC – A limousine service with two Tomberlin E-merge vehicles as part of their fleet had to cease using the LSVs when the city attorneys determined the vehicles violated city code and zoning ordinance. The owner hopes the city will revisit the issue later in the year.

Wausau, WI – City amends ordinance to allow NEVs to be driven on some city streets.

Massachusetts – Legislation bans the use of NEVs on roads with speed limits above 30 mph and requires that they follow the same licensing and registration rules as cars. Additional legislation allows the Registry of Motor Vehicles to register as “motorcycles” three-wheeled electric vehicles that have standard safety equipment and travel no faster than 40 miles per hour. (i.e. Zap Xebra) Such vehicles could be registered at the discretion of the Registrar, and would be limited to traveling on public roads having speed limits of 40 miles per hour or less.

Pittsfield, IL – Ordinance proposed to allow the use of NEVs and golf cars to operate on city streets with speed limits of 35 mph or less and cross streets with higher speed limits.

Indiana – Legislation proposed to allow mini-trucks to be licensed and titled. Apparently the state’s motor vehicle department has been inconsistent in their approach to these vehicles. The department plans to title them as off-road vehicles, which allows owners to drive them on secondary roads in some Indiana counties.