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Cartmakers in Asia stimulated

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By TOM JACKSON

Published: October 28, 2009

LAND O' LAKES - On a modest rectangle of land on U.S. 41 where Golf Car Depot hangs its Pasco shingle, two things, intensely related, happened on a recent Saturday coinciding with the publishing of a breathtaking editorial in The Wall Street Journal.

The telephone rang with an expectant urgency, an eager prospect at the other end. And Marty Luster, who makes his living selling golf carts to eager prospects, well, his blood pressure began rising.

In a piece headlined Cash for Clubbers, the Journal noted the perverse incentive included in President Barack Obama's stimulus package: a tax credit ranging from $4,200 to $5,500 for the purchase of an electric vehicle, so long as the conveyance is, as they say in the trade, "street legal."

As word of the credit has gotten around, these carts, classified as "neighborhood electric vehicles," or NEVs, have become hot properties.

Unintended consequences?

After all, $5,500 can cover two-thirds or more of the price of a new NEV. Moreover, unlike a deduction, which shrinks before-tax income, the credit is applied against the purchaser's tax bill, creating a dollar-for-dollar reduction in his 2009 federal obligation.

Here's what the Journal failed to mention, and it's the part that has Luster hot under the collar: The market for street-legal electric carts is dominated by Far East manufacturers. Familiar names such as Tomberlin, Star and Electro all have Asian headquarters.

Meanwhile, E-Z-Go and Club Car, the dominant American electric vehicle companies, do not yet produce street-legal versions of their popular golf carts. Which explains much of E-Z-Go dealer Luster's consternation. It gets worse. Although Golf Car Depot converts carts into NEVs, only those that roll out of the factory street-ready qualify for the tax credit.

"We could be selling a lot more carts," Luster says. "Everybody who calls is looking for the tax credit, and we can't help them." Luster grudgingly concedes the logic. "Just like Cash for Clunkers," he says. "You couldn't make (miles-per-gallon) conversions in your garage and get the cash."

Cold comfort

Tax-credit shoppers determined to scratch a patriotic itch can find relief with Columbia ParCar, a manufacturer based in Reedsburg, Wis. But you'll have to drive a little. The nearest ParCar dealerships are in Leesburg, Haines City and Kissimmee.

But opportunities on Asia-based NEVs abound. Jacksonville-based Gary Rhodes reports a boom among the dealers supplied by his company, Gator Moto Utility Vehicles, which specializes in Chinese imports. Rhodes concedes the conflicts of national interest, but he is otherwise unapologetic.

"It's just like Cash for Clunkers," he says, "where most of the benefit went to Toyota and Nissan."

Yep. It's hard to decide which aspect of the cash-for-carts program is more irritating. But Marty Luster has a pretty good idea.

Keyword: The Jax Files, for Tom Jackson's bonus insights.

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