As of the end of 2007 (before the recent surge in gas prices), there were just under 1 million hybrid vehicles in use in th U.S.
http://www.eere.energy.gov/afdc/data/docs/hev_sales_model_year.xls
As I recounted in a prior post, I was surprised that — for practical purposes — there aren’t any tax credits available for hybrid cars to offset some of their price premium over conventional autos.
The Energy Policy Act of 2005 provided income tax credits up to $3,400 (depending on the make & model of car), for hybrids purchased by individuals after January 1, 2006.
But, the credits weren’t applicable to taxpayers falling into the Alternative Minimum Tax category, and only the first 60,000 hybrid vehicles sold by each manufacturer qualified. The allowable credits were phased out as manufacturers approached their 60,000 limits.
For example, a Prius qualified for $3,150 credit on January 1, 2006. That got cut to $1,585 on October 1, 2006; $785.50 on April 1, 2007; and to zero on October 1, 2007.
See http://www.fueleconomy.gov/feg/tax_hybrid.shtml for current hybrid tax incentives
The price premium for hybrids is somewhere between “statistically significant” and — with long payback periods — “economically disqualifying “.
So, wouldn’t it make sense to reinstitute some kind of tax incentive to stimulate the shift? It could be done quickly — with the stroke of a couple of pens.
Make it big enough to matter, keep it both simple (no silly sliding scales) and broadly available (folks paying AMTare penalized enough), and watchdog the auto companies and dealers so they don’t just inflate the prices.
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July 18, 2008 at 1:10 pm |
I absolutely agree.
Especially since the current situation gives the rational consumer the preference of spending an additional $5,000 (~566*9) with some of the least friendly countries in the world. Given better economics, I would hope that most would prefer to send that support to the largest automaker of a U.S. ally, and it’s significant U.S FDI presence.
Oh, and save the planet a little too.
July 20, 2008 at 7:07 pm |
It may or may not be intentional, but a hybrid car tax credit would be a tax credit for the rich. The 2008 4WD Chevy Tahoe Hybrid gets 20 mpg and costs ~$53k. The Honda Civic (non-hybrid) gets 34 mpg and costs between $16-20k. The suburban soccer mom who uses her “hybrid” to run errands gets a tax credit, but the $40k/yr blue collar worker who commutes in a Civic gets nothing? A tax credit based on mpg makes more sense.