Energy Bill Provides Sweet Rewards for Hybrid, Diesel Owners

Washington DC August 1, 2005; The AIADA newsletter reported that the Energy bill, currently awaiting signature from President Bush, would provide some of the biggest tax credits to date for hybrid consumers, according to an analysis by the Union of Concerned Scientists.

Depending on the model purchased, hybrid owners will receive $1,700 to $3,000 in tax credits beginning January 1, 2006. At present, hybrid consumers receive a $2,000 tax deduction, which is less attractive than tax credits that provide tax payers a dollar-for-dollar reduction.

According to USA Today, “The new energy legislation includes a bigger credit for hybrids that save the most fuel compared with 2002 models and those expected to conserve the most fuel over the life of the vehicle.”

Consumers of clean-burning diesel cars, trucks and SUVs will be eligible for the same kind of tax credits as hybrid consumers under the new legislation. Beginning January 1, 2006 and extending through December 31, 2010, consumers who purchase diesel-powered vehicles will be eligible for up to $3,400 in tax credits based on the weight, fuel efficiency rating and emissions level of the vehicle, as determined by the U.S. Environmental Protection Agency. "These incentives are an important step in expanding the market for energy efficient vehicles," said Allen Schaeffer, executive director of the Diesel Technology Forum.

When Congress first enacted tax incentives for hybrid vehicles in 2001 there were just two hybrid models on the market. Thanks in part to those incentives, there will be nearly 10 hybrid models for sale in the U.S. by the end of the year. "Now that diesel vehicles will be eligible for the same advanced-vehicle credits as hybrids, we -- along with a growing chorus of industry analysts -- expect similar growth in the clean diesel market," added Schaeffer.