Stimulus offers modest auto savings

Neighborhood electric vehicles are plug-ins that travel a maximum of 25 miles per hour and have a battery capacity of at least 4 kilowatt hours, or 2.5 kilowatt hours in the case of 2- or 3-wheeled vehicles.

In 2010, highway-speed plug-in vehicles will be eligible for a tax credit of up to $7,500. The tax credit will be a base amount of $2,500 and then will increase $417 for each kilowatt hour of capacity the battery has over 5 kilowatt hours, with a cap of $5,000.

This tax credit will begin to phase out for each manufacturer after a certain number of vehicles have been sold.

"When a manufacturer has sold 200,000 vehicles, the phase-out will start," says Mark Luscombe, principal federal tax analyst at CCH, a provider of tax, accounting and audit information, software and services.

There is also a credit for converting a traditional hybrid vehicle to a plug-in. The credit covers up to 10 percent of the cost, with a limit of $40,000.