Volkswagen's Jetta TDI is already eligible for a $1,300 tax credit courtesy of the Internal Revenue Service, thanks to its clean diesel engine. Now, the IRS has also extended this to certain Mercedes-Benz models. Previously the federal alternative-powertrain tax credit only applied to hybrid models, but the latest generation of diesel engines from VW and Mercedes have proved their mettle at competing with hybrids for fuel economy.

According to Automotive News, the Mercedes GL320 (pictured), R320 and ML320 Bluetec will all be eligible, and the exact amount of the credit will vary depending on how much fuel the diesel variant will conserve when compared with a 2002 model. All three Mercedes models use a 3.0L turbocharged diesel V6, with 210hp (156kW) and almost 400lb-ft (540Nm) of torque - coupled with mileage figures of 18/24 mpg city/highway (13.0 and 9.8L/100km) for the ML320 and R320 and 17/23mpg (13.8 and 10.2L/100km) for the R320.

Other manufacturers are also developing clean diesels, including BMW, but the Munich company has yet to make a statement on whether or not it will attempt to have its cars certified for the tax credit. The tax credit is limited to just 60,000 vehicles per manufacturer, and only extends to vehicles bought before the end of 2010, so not all buyers will be able to take advantage of the incentive.