Loss of hybrid tax breaks may hurt Toyota

Part of HighGear M E D I A

Is the Mercedes C-Class Really Worth the Cost of...

Siddarth Raja September 21st, 2006

By Siddarth Raja Author September 21st, 2006

Articles Contributed: 596
Comments Posted: 75
Leaderboard Rank: #25

352 Views
No Comments

December 31st, 1969 It seems that the old saying “no good deed goes unpunished” is true, at least in the case of Toyota, whose hybrid vehicles have been a massive sales success. Most hybrids are subsidised by federal tax breaks that can go up to $3150 in the case of the Prius. The problem for Toyota is that they’ve been too successful and have reached the legal limit of 60,000 for production of hybrid cars to remain eligible for a tax break. Under the laws passed by Congress, once production is reached the full tax break lasts for one more quarter, then halves for six months, then halves again for six months, and is then abolished altogether. Other manufacturers producing hybrids such as Honda, GM, and Ford haven’t reached this limit and will therefore continue getting benefits. What does this mean for you? If you’re in the market for a Toyota hybrid, you better move quickly to save a fair chunk of cash. There’s no word on how dealers will react to these tax cuts.

Loss of hybrid tax breaks may hurt Toyota

Enlarge Photo

It seems that the old saying “no good deed goes unpunished” is true, at least in the case of Toyota, whose hybrid vehicles have been a massive sales success. Most hybrids are subsidised by federal tax breaks that can go up to $3150 in the case of the Prius. The problem for Toyota is that they’ve been too successful and have reached the legal limit of 60,000 for production of hybrid cars to remain eligible for a tax break.

Under the laws passed by Congress, once production is reached the full tax break lasts for one more quarter, then halves for six months, then halves again for six months, and is then abolished altogether.

Other manufacturers producing hybrids such as Honda, GM, and Ford haven’t reached this limit and will therefore continue getting benefits. What does this mean for you? If you’re in the market for a Toyota hybrid, you better move quickly to save a fair chunk of cash. There’s no word on how dealers will react to these tax cuts.

Tags: Industry