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Hybrid Cars Should Get Tax Credit: Government Report

by Staff
May 18, 2001
2 min to read


Auto dealers could soon lure buyers with signs on some of the cars in their showrooms advising of thousands of dollars in tax credits. While most of the report from the energy task force headed by Vice President Dick Cheney is trickle-down energy policy, proposing inducements for corporations and changes in foreign policy to try to lower prices, but there are a few proposals for direct impact. Not a one is completely new, but according to experts, one in particular might be more effective than previous efforts: tax credits on cars that use less fuel. Under the Energy Policy Act of 1992, signed by the president's father, the government offered tax inducements to buyers of vehicles that ran on natural gas, methanol and other "alternative fuels." "But that tax break did not help much because few of those vehicles were attractive to consumers," said Douglas I. Greenhaus, the director of environment, health and safety at the National Automobile Dealers Association (NADA). A tax credit on hybrid vehicles, as proposed in the Cheney report, might have more impact, according to Greenhaus. "The public is going to be much quicker to adopt these vehicles than those that required a totally different fueling system," he told The New York Times. "I don't know exactly what proposal will work out in the end, but I see these things flourishing in the middle of this decade." NADA applauded President Bush's energy policy group recommendations of a tax incentive to help increase motor vehicle energy efficiency. "Tax credits could be an excellent strategy for encouraging consumers to purchase vehicles equipped with new, energy efficient technologies," said Bob Maguire, NADA chairman and new-car dealer from Bordentown, N.J. The tax credit recommendation was one of many set out in the newly-issued National Energy Policy Development Group's (NEPD) Report. NADA also endorsed the NEPD Group's "market-based" approach with respect to increasing the national average fuel economy of new motor vehicles. NADA said it was also "pleased" with the recommendation that any Corporate Average Fuel Economy (CAFE) standards should be based on "sound science" and should take into account passenger safety and economic concerns.

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