April 25, 2006
President Bush says Congress ought to eliminate the limit on the number of hybrid vehicles produced by an automaker that qualify for current tax credits.
The credits took effect this year and are as much as $3,400 per vehicle. Once an automaker sells 60,000 eligible vehicles, however, the credits are phased out.
Toyota would be the big winner if the law was to be changed. The Prius will reach the tax credit ceiling by the middle of this year.
Bush offered the proposal in a speech to the Renewable Fuels Association, which represents producers of ethanol.
Some auto industry analysts suggest the tax credit cap is an effort by domestic automakers to keep all the benefits of the tax credits from going to Honda and Toyota customers. Toyota is the acknowledged leader in hybrid production.