The tax collector is back with a vengeance
Beating the cold by birding online

Hybrid help sought by Toyota top management

Want a Toyota hybrid but are unhappy that a purchase now will get you a much smaller tax break than buyers got a few months ago? You're not alone.

Toyota executives are calling for extension of the full tax credit for the Japanese automaker's popular hybrids, according to various wire service reports (Reuters, AP).

Toyota's North American president, Jim Press, says sales of its hybrids have plummeted since the full credit expired in October. The most Toyota_logo_5 popular vehicle, the Prius, began the year with a $3,150 tax credit. Because Toyota has already sold more than 60,000 of such vehicles (well more: 144,218 through the end of September), the credit dropped to $1,575 on Oct. 1. Under the legislation that created the tax break, Toyota hybrid tax savings will be reduced further on April 1.

"By encouraging consumer support for a promising new technology, our government is supporting innovation and investing in our nation's future," Press told the Electric Drive Transportation Association. "We'd like to see those tax incentives continue."

The other makers of tax-break eligible autos, Honda, Ford and GM, have not yet hit the sales mark that will lower their autos' credit. In fact, some companies are turning their lower sales into a sales pitch. Take a look at this Bloomberg report, which begins: "Honda Motor Co., the second-biggest seller of gasoline-electric autos, said buyers of its 2007 hybrid models still qualify for U.S. tax credits of as much as $2,100, more than consumers get for Toyota Motor Corp.'s Prius."

More government participation urged: Toyota's Press also is calling for the federal government to walk the walk when it comes to energy efficient vehicles. Fleet purchases for military and government use, he says, would accelerate the development of alternative fuel vehicles.

Don't expect Toyota's suggestions to be considered in the coming lame duck session. Congress has a lot of other stuff on its agenda, including measures to keep 10 of 12 federal agencies running and a collection of other individual tax breaks that expired last year.

But come January keep an eye on Toyota's efforts. The company might just get some lobbying help from Dubya, who has previously voiced support for extending tax credits for hybrids and alternative vehicles.

Personally, I agree with Toyota on this. No, I don't own any type of hybrid, am not planning on getting one (or any auto) in the near future and I don't have a relative that sells the vehicles. It just strikes me as wrong to penalize someone for doing the best job, which apparently is what most hybrid buyers think Toyota is doing.

The credit phase-out is a blatant sop to companies (read Ford and GM) bringing up the rear in this technology area. I can see giving a company a break to help it get a firmer footing in a new area. But this isn't a new area. Hybrids have been around a while and domestic automakers opted instead to focus on gas guzzlers instead of fuel efficient autos. Live by the MPG, die by the MPG. Welcome to the free market system.

You can read my previous blog items on the tax break here (this story will show up first, so just keep scrolling down). I also wrote this article for explaining how the credit works.


Feed You can follow this conversation by subscribing to the comment feed for this post.


I agree. The woes of Big Auto have been brought about by Big Auto, and if Toyota and others are developing more efficient alternatives to the Excursion and other deathtraps, they shouldn't be punished. I don't think the detroit companies care about innovation right now. They care about not going bankrupt.

The comments to this entry are closed.