Students school Detroit with diesel-hybrid project

An inspirational story from last February:

A car that can go from zero to 60 in four seconds and get more than 50 miles to the gallon would be enough to pique any driver’s interest. So who do we have to thank for it. Ford? GM? Toyota? No — just Victor, David, Cheeseborough, Bruce, and Kosi, five kids from the auto shop program at West Philadelphia High School

Still amazes me that ethanol gets any news at all when there are projects like this out there. As I have said before, ethanol is a great way to make biodiesel. And hybrid-diesel engines are the right technology right now. But these kids have not only proven this fact, they seem rather astute about what is blocking innovation:

Stepping up is something the big automakers have yet to do. They’re still in the early stages of marketing hybrid cars while playing catch-up to the Bad News Bears of auto shop.

“We made this work,” says Hauger. “We’re not geniuses. So why aren’t they doing it?”

Kosi thinks he knows why. The answer, he says, is the big oil companies.

Imagine if the US government would give tax incentives to people developing alternative energy vehicles (like schools!) rather than to people buying Hummers and Escalades. Frankly, I don’t think you can blame just the oil companies:

However, owners of small businesses who buy a Hummer, Ford Excursion or other SUV weighing more than 3 tons get a deduction of up to $25,000 – depending on tax bracket – if they use the vehicle exclusively for work.

The benefits don’t stop there. Once they subtract the $25,000 from the cost of their 3-ton SUV, small-business owners can deduct the depreciation on the remaining amount. Someone who bought a $60,000 SUV, for example, can claim the remaining $35,000 over six years.

No such luck for small-business owners who buy cars weighing less than 3 tons. No matter how much the vehicles cost, they can claim just $15,535 in depreciation over six years and $1,675 each additional year. Deductions for depreciation on trucks and vans weighing less than 3 tons are slightly more generous.

The logic used to be that vehicles weighing over three tons would have to be some kind of heavy equipment like a specialized work truck that no-one would buy unless they had to do some good old fashioned American labor. Of course, that rule went right up in smoke as those with the most money found another way to shelter themselves:

Trying to jump-start the economy after the attacks of Sept. 11, 2001, Congress increased the deduction for small businesses from $25,000 to $100,000 for 2003 and most of 2004.

However, lawyers, doctors and others also took advantage of the measure.

That’s right. If you were in the right tax bracket, you could get $100,000 deduction on a vehicle over three tons. Great way to “jump-start the economy”, don’t you think? More doctors and lawyers with luxury SUVs has really made a difference. Just look at the wonderful results, as only three years later GM and Ford are finding a great deal of insecurity in their industry — tens of thousands of workers laid-off.

Dealers and owners who have benefited from the SUV tax incentive say it helps spur a key part of the economy – automaking – and allows small-business owners to purchase vehicles that improve their bottom line.

Short-sightedness. The benefit was like a shot in the arm that killed the symptoms but left the problem to grow worse. Now small-business owners must wonder if they will have to off-load their guzzler before it’s worthless and be forced to buy a foreign vehicle to improve their bottom line.

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