• Jul 21, 2006
U.S. federal tax breaks for buyers of hybrid cars will start shrinking this fall, with Toyota hitting the production limit of 60,000 units after only five months of sales.

The declining scale for tax credits triggered by the production limit will cut credits for Toyota and Lexus hybrids in half by the end of September, and to a quarter of the current rate next April. However, full tax credits are still available for Toyota's market-leading hybrids through the end of the current quarter, so we can expect a sales boost as buyers hurry to get the maximum tax break.

Hybrids from other manufacturers aren't selling as well, so they will hang on to their full tax credit until they hit the 60,000 unit ceiling - which won't be anytime soon. In the first quarter, Toyota sold 41,779 hybrids to Honda's 9,072 and Ford's 6,192.

[Source: USAToday]


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  • 15 Comments
      • 8 Years Ago
      This is for the Federal tax credit program...many states also have their own tax credit system for buyers of hybrids. And yes, it is amazing that they can keep tax credits for gas-guzzling SUVs alive indefinitely...but not for hybrids. But the tax credit for hybrids was only supposed to encourage car companies to START production.
      I guess the lobby for battery manufacturers isn't as big/rich as the oil lobby.
      And Jane...where are folks supposed to buy a NEW diesel? VW will only have leftover diesels for the '07 model year and isn't saying IF they will sell any in '08. What? Mercedes? I will never understand why folks get a big/expensive car and then want to save money on fuel. That pretty much leaves pickup trucks...vehicles not exactly known for fuel economy, except compared to other big pickup trucks.
      • 8 Years Ago
      The article is misleading about Honda's sales. Honda's hybrids are not "selling as well" mainly because they can't make enough to satisfy demand. Try finding a Civic Hybrid at a dealer and you'll get the idea.

      Ford is indeed having to add incentives to the Escape Hybrid. There are no incentives on the Civic Hybrid.
      • 8 Years Ago
      Tax breaks for buying hybrid cars don't matter for those of us who are in the wrong tax bracket to begin with. Cheaper cars like the Corolla are still the only option for me. I'm not asking for sympathy, just an affordable car.
      • 8 Years Ago
      It still frustrates me that an SUV hybrid owner will get a tax brake on a vehicle that has worse mileage than a smaller more economical car. Now I know there are some people that need the space, but how many times do you see one driving down the road with only a diver? Wisen up and give a tax break based on fuel economy. Oh wait they do, its called the gas tax. The gov should just let the tax paid at the pump be the difference.
      • 8 Years Ago
      Barney i'm totaly agree with you.
      Paul
      • 8 Years Ago
      the US should subsidize with tax credits all Asian made cars. This will help put the US auto industry out of our misery. I just saw an issue of CU and its clear that the US does not have the engineering talent to produce a quality car. Almost every one of the US designs had a black dot for reliability. The Asian designs had a good rating. Americans just cant cut it in the global economy. Too poorly educated I guess or just plain lazy
      • 8 Years Ago
      ". the US should subsidize with tax credits all Asian made cars. This will help put the US auto industry out of our misery. I just saw an issue of CU and its clear that the US does not have the engineering talent to produce a quality car. Almost every one of the US designs had a black dot for reliability. The Asian designs had a good rating. Americans just cant cut it in the global economy. Too poorly educated I guess or just plain lazy "

      Or maybe the US consumers who use CR as their only source (a poor source too) to base this opinion are too poorly educated or just lazy. Up until this years JD Power overhaul, many US vehicles finished in the top three of their candidate and I believe Lincoln and Caddy were ahead of many foreign divisions. Not that I think JD power is all that great... Ask yourself the Toyota Matrix gets better reliability for engine than the Ponitac Vibe according to CR
      • 8 Years Ago
      WhiteGrace, if the moans and groans of other former owners of Saabs is anything to go buy (check out Edmunds.com) your favorite brand has been going downhill, FAST, since it was aquired by GM.

      I think many brands of cars on the road today fall into a huge middle gound of relatively good reliability. It doesn't matter which country or company builds and/or designs them. However, there are also a few cars and trucks out there that are poorly designed, haphazardly built, and more importantly...indifferently maintained. My elderly parents have had two different Tauruses, both with the pushrod engine, and both have run faultlessly for a total of more than 200,000 miles. My father has owned several Chevy Corsicas...they are poorly assembled, yet run nearly forever. And my own experiences with Honda products tells me they are dull, but extremely reliable. My current Integra has 150,000 miles on it's original engine and transmission, with NO rust through. Yes, the clear coat on the paint is pretty much gone...but the car IS 15 years old.
      • 7 Years Ago
      Toyota wants an extension of a tax credit which provided the saving until $3.150 to the purchasers of the hybrid cars. But some of the rivals of Toyota - to equalize those which make hybrids - are not like enthusiastic. Toyota, the largest hybrid manufacturer, is the only manufacturer of cars to have up to now reached the bench of limit of 60.000 hybrid-sales by Congress in the legislation which allowed cuts of income tax to buy the hybrid cars because a manner of encouraging the savings in fuel and the cleaner air. The amount of the credit is based on the effectiveness of fuel. Though Toyota reached the limit, the purchasers of its hybrids always obtain a credit, but it is much smaller and will disappear entirely at the end of this year. Before striking the limit, Prius of Toyota received the greatest tax relief of $3.150. The tax tax incentive to buy Prius or any other hybrid of Toyota fell in half from last October and will be cut inside to half still on April 1. “The hat should be increased so that us allow themselves to increase,” Jim Press, president of North America engine of Toyota, said in an interview to the North-American international automatic exposure here. “To require for decreased Prius when there was a reducing transformer in hybrid tax credits. We must have a certain volume to obtain the current principal inside for economies of scale. ” The support also of pressure of the hybrids should just exceed the tax credits to include movements such as the purchase of the hybrid cars for fleets of government. Up to now, Toyota seems to be mainly alone in the reauthorization seeking of the subsidies. The alliance of the manufacturers of car, a commercia group based in Washington which includes Toyota as a member, did not take a stand on still prolonging the subsidies....
      http://www.4car.net
      • 8 Years Ago
      I think people are forgeting about another alternative, diesel. I have a 2003 diesel jetta, 47 HWY and 37 CTY. I've heard that the new jetta diesels do slightly better. They are not as environmentally friendly but they will help save oil.
      • 8 Years Ago
      Bush has already asked Congress to extend the hybrid tax credit, so I wouldn't be surprised if this happens before October 1st.

      Price comparisons at my site include the tax credits, which in some cases make a hybrid close in price to its non-hybrid counterpart. But can you get a similar discount from the dealer?

      http://www.truedelta.com/prices.php
      • 8 Years Ago
      Reflecting on #6. American auto companies made cars to make money. Obsolescence was built in. Ugly after one year and cheesy after 3. Go buy another please. Europeans were first on these shores with well designed and well built quality and long lasting cars which embraced their owners. Asians of course were next but it took them longer to figure it all out. They have to a point. But their cars being produced today in the US are starting to show the American influence. Look at the Civic. How small it was in the beginning and how big it is today. And the planned rust spots on the rear wheel openings of Civics and Accords. So familiar. Makes me recall the old familiar rust spots on Fords and GMs. Don't even begin on Chryslers and Plymouths of years gone by. But back to the Europeans. Their cars today have retained the same family of design values. Cars that look good, sound good, run good, ride good, and last and don't abandon their owners after 2 or 3 or even 5 years. Lastly, my Saab is an 85 purchased new by me and now has a quarter of a millions miles and not a rattle to be heard. Yes, it has had some cosmetic body work done but only after its' 17th year. In conclusion, Americans made many cars to make lots of money. Imports made money by making good cars. I've over simplified and many will take issue with what I have written but I feel my underlying logic is sound.
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