Tax credit for electric vehicles to be extended to hybrids

May 21, 2002 Washington DC , BLOOMBERG NEWS reported today that gasoline-electric hybrid cars will be eligible for tax U.S. credits now granted to electric vehicles, the Internal Revenue Service said, a move that may boost sales of vehicles sold by Honda Motor Co. and Toyota Motor Corp.

Electric vehicles can receive a $2,000 tax credit. The IRS is seeking information from automakers to determine how much the credit should be for hybrids, which use a combination of an electric motor and a gasoline engine, IRS spokesman Bruce Friedland said.

Honda's Insight and Toyota's Prius are hybrid cars currently available in the U.S. Ford Motor Co. has said it plans to introduce a gasoline-electric version of its small Escape sport-utility vehicle next year. DaimlerChrysler AG said Friday that it won't add a hybrid version of its Dodge Durango sport-utility vehicle next year because demand for fuel-efficient trucks isn't as strong as expected.

Automakers are trying to develop vehicles that pollute less and burn less fuel as governments around the world set tougher standards on car emissions. Honda, Japan's second-largest automaker, and bigger rival Toyota were the first to release hybrid models into the market.