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Think you can’t afford an electric car?

Several carmakers are set to release all-electric vehicles this year, including to the Hawaii market, and while the cars have yet to hit showrooms, the eco-friendly models already carry the stigma of being overpriced.

But incentives at the state and federal level — up to a total of $12,000 in rebates and tax credits — are available to Hawaii residents to help ease the sticker shock of electric vehicles, some of which are priced at least twice as high as similar gasoline-powered models.

For example, Nissan will release its all-electric in November 2010 with a suggested retail price of $33,720. Meanwhile, General Motors will do a limited release of its , also in November, with an expected price tag of $40,000. Those prices compare to the $15,450 starting price for the 2010 Toyota Corolla.

Car manufacturers and auto experts point to battery technology as the most expensive component of electric vehicles, which they say impact the retail cost. Depending on an electric vehicle’s size, batteries can cost between $6,000 and $15,000. The cost, which already has come down from between $15,000 and $20,000 a few years ago, is expected to decrease as the technology improves and demand for electric vehicles increases.

“The costs of creating an automotive market dominated by electric and hybrid cars are prohibitively high,” according to a 2009 report by The Boston Consulting Group called, “The Comeback of the Electric Car?” estimates that hybrids and plug-in electric cars cost about $7,000 more to make than gas-powered cars because of their pricey batteries. “Clearly, government subsidies will play a major role in brining the cost to own electric vehicles down to an attractive level for the consumer.”

+Estimated by industry analysts; General Motors has not announced official price.
++The base MSRP for the e-Zone may not provide a level of vehicle close to a Volt or Leaf. The price can go up to $20,000.

A state rebate program that launches Aug. 1, 2010 and an existing federal tax credit — both funded by the American Recovery and Reinvestment Act — can together help knock off as much as $12,000 from the purchase price of qualifying electric vehicles.

The rebate, however, is not an instant rebate, and the tax credit would be applied toward taxes the following April, so buyers would be required come up with the full amount in cash or financing to purchase the car.

The Hawaii State Energy Office, within the Department of Business, Economic Development and Tourism, will launch a rebate program offering rebates of up to 20 percent of an electric vehicle’s purchase price, up to a maximum of $4,500 per vehicle. That means any EV priced at $22,500 or higher can realize the full $4,500 rebate.

In announcing the , Lt. Gov. James “Duke” Aiona said: “Accelerating the adoption of electric drive vehicles in Hawaii is an essential part of the goal of the to move toward 70 percent clean energy production by 2030. Electric vehicles can run on clean electricity generated from locally available renewable energy sources such as sun, wind, and ocean power,” instead of imported petroleum fuels.

Vehicles eligible for the state rebate must be “freeway capable” and “commercially available,” said Ted Peck, administrator of the Hawaii State Energy Office.

That means, Peck said, the two lines of electric cars currently made by , which plans to build a manufacturing plant in Hawaii, would not qualify for the state rebate because they are classified as low-speed “neighborhood electric vehicles,” even though they can reach maximum speeds of 40 miles per hour. CT&T is developing a full-speed all-electric coupe that is expected to be released in 2011, and be assembled at its Oahu plant.

Funds for the rebate are limited. The state has $1 million in federal stimulus funds for the program, or enough to pay out approximately 222 full rebates. The energy office says it is looking into possible funding sources to create an ongoing program, but the current funds are expected to be paid out by September 2011.

Auto dealerships will not be involved in handling or processing the rebates. While DBEDT is administering the program, the state will process the rebate applications. Rebate forms will have to be downloaded at at , filled out manually and attached to a copy of the receipt and proof of registration.

Federal Tax Credit a Big Boost

At the federal level, a tax credit of between $2,500 and $7,500 is available to individuals and businesses for the purchase of qualified battery electric cars and light trucks. The credit is applied to the amount of federal taxes owed in the year in which the vehicle is purchased. If you bought an EV this year, you wouldn’t be able to claim the credit until tax time next April.

To qualify, vehicles must “draw propulsion using a battery with at least 4 kilowatt-hours that can be recharged from an external source of electricity,” according to the .

Calculating the amount of the credit can be tricky because the credit starts at $2,500 and increases in increments of $417 for each kilowatt-hour of battery capacity in excess of 4 kilowatt-hours, up to the $7,500 cap. The IRS website has a that qualified for the 2009 tax year, but has yet to publish a listing for 2010 makes and models.

The Nissan Leaf and Chevy Volt would qualify for the full amount of the credit, according to the manufacturers. Smaller models like those made by CT&T, would qualify for a smaller credit. The IRS approved credits of $4,885.24 and $4,635.04 last year for CT&T’s e-Zone and c-Zone models, respectively.

The tax credit is not refundable, so if the credit exceeds tax liability, the IRS will not issue a refund for the difference. And the credit cannot be carried forward to future tax years or applied to previous tax years. But most Hawaii taxpayers would be able to claim the full credit in a single year, said Honolulu accountant Tony Lim.

Lim said a single taxpayer with taxable income of roughly $20,000 would have enough tax liability to use the minimum $2,500 credit against federal taxes, and could use the maximum $7,500 credit if he or she had taxable income of at least $45,000. For a married couple filing jointly, the taxable income thresholds would be $22,000 and $55,000 respectively, for the minimum and maximum credit amounts.

The tax credit is designed to phase out for a manufacturer’s vehicles when 200,000 qualifying vehicles made by that manufacturer have been sold in the United States. Once that amount is hit, the credit phases out over the following year, dropping to half the original amount of the credit and then to a quarter of the amount.

Electric Vehicles Cheaper to Run

Beyond saving on the purchase price, electric vehicles are cheaper to run than gas-powered versions, based on Hawaii’s current gasoline and electricity prices.

Take a gas-powered car that gets 30 miles per gallon on city streets. With average gas prices in Hawaii at $3.45 the first week of July 2010, it would cost 11.5 cents per mile to drive that car. The average driver’s daily commute is 30 miles roundtrip, and approximately 9,000 miles a year, which amounts to $1,035 in annual gas expenses at Hawaii gas prices.

The cost to power electric cars would show up on your monthly electricity bill from Hawaiian Electric Co., which charges usage in kilowatt-hours.

Hawaiian Electric’s residential electricity rates are at 24 cents per kilowatt-hour, and electric cars use about .25 kilowatt-hours per mile. That means energy costs to power an electric vehicle at home would amount to 6 cents per mile, or $540 a year. The bill would be even less for homes that offset electricity costs with roof-top photovoltaic solar systems.

General Motors says the Volt will typically use about 2,500 kilowatt-hours annually, which would amount to $600 in electricity costs in Hawaii. By comparison, a residential central air conditioning system consumes about 5,300 kilowatt-hours annually, and a clothes dryer consumes about 1,200 kilowatt-hours annually.

The push for electric cars is evident in other states as well, where incentives beyond rebates and tax credits are being offered to drivers of electric vehicles. In California, Texas, New York and Maryland, for example, governments there are offering preferred parking for electric vehicles, free public parking, and HOV-lane privileges on highways, regardless of the number of passengers.