Tax credit for hybrid cars

Tax credit for hybrid cars
DETROIT - The U.S. Treasury Secretary John Snow has announced far reaching tax breaks for people who opt to buy hybrid cars. These gasoline-electric vehicles could end up saving as much as $3,400 for consumers.

"Development and use of hybrid vehicles is a key step toward reducing gasoline consumption, emissions of air pollutants and greenhouse gas emissions," Snow said. He was speaking at a Ford Motor research center in Detroit. This tax credit scheme also applies to vehicles that use 'green' or alternative fuel systems.

Under the bill, which was signed into a law in August, if a person or a business has more than one hybrid car, each of these would be eligible for the tax credit. The rule applies to vehicles that were brought into service after January 1. These tax breaks are sure to be welcomed since they are designed to boost sales. Companies like Ford and General Motors, which are struggling against competition by Asian carmakers would be relieved with these tax concessions.

"I commend the manufacturers who are making these energy-efficient and environment-friendly vehicles and hope that the President's energy bill proves to be an important step in their rising prominence on American roads," said Snow. "We're hopeful that with these credits we'll see a burst of interest in the hybrid vehicles."

In the US, hybrid cars are manufactured by Toyota Corp, Ford Motors and Honda Motor Co. Ford is determined to push through its hybrid car segment and has targeted a production of 250,000 cars by 2010. It has two models namely the Escape and the Mercury Mariner on the market at present, but the winner in the hybrid stakes has been Toyota Motor's Prius.