Tax Credits Proposed for Hybrid Vehicles

February 05, 2002 by Jeff Shepard

In its fiscal 2003 budget recommendations to Congress, the Bush administration proposed that consumers who buy gasoline-electric hybrid vehicles in the next seven years would get up to $4,000 in tax credits under the proposed budget, while buyers of fuel-cell vehicles could get up to $8,000.

The credits would vary based on the vehicle's fuel efficiency. For hybrids, the credit would depend on the share of the vehicle's power generated by the electric motor and by the improvement in city fuel economy ratings over a similar 2000 model year vehicle. For fuel cell vehicles, the minimum credit would be $4,000, with the maximum $8,000 credit available if the vehicle improved on a 2000 model year vehicle city fuel economy by 300 percent. Both credits would cover purchases between December 31, 2000, and January 1, 2008.