Waymo, the self-driving car unit of Google's parent company, Alphabet, put in an order for 62,000 Chrysler Pacifica Hybrid minivans last week to put into test fleets around the country. Riders will be able to summon the vans as taxis and be whisked to their destination complete with a "driver" who isn't actually driving. At least, that's the plan.
The implications are huge, not just for Waymo and for self-driving cars, but potentially for buyers interested in plug-in models from Fiat Chrysler Automobiles in the future.
A report in Jalopnik this week points out that for each of those purchases, Waymo (Google), can claim the federal tax credit of $7,500. Plug-in hybrid with batteries the size of those in the Pacifica Hybrid are eligible for the full credit. In sum, that could give the Silicon Valley giant a $465 million tax break between now and 2020, when the purchases are scheduled to be completed.
Waymo self-driving prototype
When Congress passed the tax credits as part of the Energy Improvement and Extension Act signed by President Bush in 2008, it limited to them to 200,000 for each manufacturer to provide incentive to early buyers to offset the extra cost of buying an electric car. By the time each automaker had built 200,000 electric cars, the reasoning went, either battery prices would come down to parity with internal combustion engines (as they are starting to), or that automaker would have such a head start on the technology of the future that other automakers should be given the same opportunity. Or both.
At 62,000 vehicles, the Waymo purchase represents nearly one-third of the tax credits available to Fiat Chrysler customers.The company has also sold nearly 30,000 Fiat 500es since the car went on sale in 2013. Waymo already has 600 Pacifica Hybrids in its self-driving test fleet. It is scheduled to take delivery of the first of these additional vans late this year, and will have them in service by 2020 in its fleets in California, Phoenix, and elsewhere.
Waymo has not said whether it will claim the credits for the new purchases.
Under the law, fleet buyers are considered buyers just like any others.
Other tax credit plans in some jurisdictions, including California, England, and the exemptions that just expired in Washington State, put limits on income and/or price of the car. That could be a benefit to taxpayers and voters looking to resist subsidizing wealthy individuals or corporations such as Google. It could also limit the appeal of new technology that government is trying to support, which the wealthy are more likely to be able to afford.
We reached out to Chrysler to find out how many Pacifica Hybrids it sells. The company responded in an email that it doesn't break out sales of the Pacifica Hybrid from those of other Pacificas. It said that the company had sold 118,274 Pacificas in 2017 and another 53,910 through May of 2018. "The vast majority of our Pacifica sales are non-hybrid," the email said.
Waymo's purchase of 62,000 Pacifica Hybrids over 2.5 years could make up not only a third of FCA's allotment of federal tax credits, but also the vast majority of Pacifica Hybrids built.