What
happens when the Prius and Toyota lose tax credits?
January
15, 2006
Since the
new Clean
Vehicle Tax Credit was approved last year, I've
complained that the credit was biased against Toyota. By
capping the tax credits by manufacturer at just 60,000
hybrids, it's obvious that Toyota will quickly run out of
deductions because of demand for the Toyota
Prius.
In recent days Secretary Snow has essentially admitted
that the credits were partially written to help out
domestic automakers, and maybe - in hindsight - that
wasn't such a bad idea.
Thus, the story of 2006, when it comes to hybrid
cars, will continue to be the Toyota Prius hybrid.
Because not every Toyota hybrid sold is going to qualify
for a tax credit, will this have an affect on the Prius
and Toyota hybrid sales?
Will this simply even the playing field between Toyota and
other automakers for the hybrid market? Will Toyota
counter with some kind of discount? Will sales on the Honda
Civic hybrid and Ford
Escape hybrid explode? Will hybrid sales, overall,
decline?
While the Clean Vehicle Tax Credit might offer a credit of $3400.00 to
some buyers, how much will that affect
most people's taxes?
I guess we'll see. Since the credit isn't felt
immediately, will people even care?
Of course, if gasoline prices continue to rise, the lack
of tax credits for the Prius might not even matter. I
think next year the U.S. will see sustained gasoline prices
near $3.00, minimally. In California, $4.00 per gallon
gasoline is going to be fairly common, and it won't just
be a spike, such as after Katrina.
Speaking of hurricanes, if another Katrina hits next year, the
predictions above will be blown away.
Anyway, that's hybrid story for 2006.
-->
Comment on this article.
|
