Owners of hybrids like this Honda Insight could save on their taxes. (Photo courtesy of the National Park Service)
President Bush has signed a new energy bill that will raise tax savings for buyers of hybrid vehicles. Supporters predict high credits will boost sales of hybrids, and those cars will save gas. But some experts doubt the move will curb demand for oil. The Great Lakes Radio Consortium’s Shawn Allee
President Bush has signed a new energy bill that will raise tax savings for buyers of hybrid vehicles. Supporters predict high credits will boost sales of hybrids, and those cars will save gas. But some experts doubt the move will curb demand for oil. The Great Lakes Radio Consortium’s Shawn Allee reports:
Starting next year, hybrid-buyers could get up to three thousand dollars in tax credits, depending on the hybrid model. Sounds like a sweet deal, but some environmental groups doubt the move will translate into national fuel savings.
That’s because hybrids make up less than one percent of the car market. Congress didn’t require the other ninety-nine percent of cars to improve their fuel savings. David Friedman directs vehicle research for the Union of Concerned Scientists.
“The only way we could have saved oil in this energy bill is if Congress had actually had raised fuel economy standards or set a real goal for saving, say, a million gallons of oil per day by 2015.”
Overall fuel savings might stall for another reason. The number of hybrid tax credits is limited to 60,000 per car maker. Toyota expects to sell more than 100,000 Prius hybrids this year alone.
For the past few years, people who have wanted to buy a more energy-efficient car have had to think small. That’s about to change. The floor of this year’s North American International Auto Show in Detroit offered a look at several new energy-efficient models due out later this year or within the next few years. The auto industry hasn’t sold very many of the cars carrying one type of new technology so far, but officials hope more choices will boost sales. The Great Lakes Radio Consortium’s Michael Leland has more:
For the past few years, people who have wanted to buy a more energy-efficient car have had to
think small. That’s about to change. The floor of this year’s North American International Auto
Show in Detroit offered a look at several new energy-efficient models due out later this year or
within the next few years. The auto industry hasn’t sold very many of the cars carrying one type
of new technology so far, but officials hope more choices will boost sales. The Great Lakes
Radio Consortium’s Michael Leland has more:
At the Toyota display at this year’s auto show, a small crowd formed around the newest version
of the gasoline-electric Prius. Toyota’s sold the car since 1997, and has made it bigger for this
year. What makes this car different is it’s powered by a gasoline-electric hybrid engine. A few
months ago, Denny Jones of Toledo, Ohio ordered a new Prius. He’s still waiting for delivery, so
he drove to Detroit to sit in one at the auto show.
“First of all, I’ve had other Toyotas, so I like the quality. They’ve made improvements on this
one. There’s hatchback. On the first style you couldn’t have a hatchback. They get better
mileage than the first one. And, overall it is a larger car.”
Gasoline-electric hybrid engines have lower emissions and get better mileage than cars with
standard gasoline engines. Toyota says the Prius gets about 50-miles per gallon. But the only
hybrids on the market so far have been small cars like the Prius and the Honda Civic.
Later this year and next, larger hybrids will roll into showrooms. Honda will offer a hybrid
Accord. And Ford will sell a hybrid version of its Escape SUV. Jerry Bissi braved an afternoon
snowstorm to come to the auto show, and was checking one out.
“I prefer to have an SUV-type vehicle for driving back and forth, all-wheel drive, the weather
conditions we have today outside. So I prefer something like that rather than the car.”
There will be several hybrid SUV’s available by next year. Toyota will sell a hybrid Highlander,
and its luxury division Lexus will offer its own model.
“Ladies and gentlemen, it is my pleasure to introduce the world’s first luxury hybrid vehicle, the
Denny Clements is a vice-president at Lexus. He says there seems to be a pent-up demand for
“Our dealers have taken a huge amount of orders just off word of mouth about Prius, I think. I
think what we have when you talk to our customers is there is a lot of very affluent people who
would like to make a statement about Middle East oil, would like to make a statement about who
they are, but they don’t want to make the sacrifices in terms of luxury amenities.”
Toyota says Americans bought about 21-thousand hybrid Priuses last year. But that’s a drop in
the bucket compared to the almost 16-million vehicles sold in the U.S. last year.
“If you added up all the hybrids that have ever been made since the beginning of time, they don’t
equal the production of one high-volume auto plant in one year.”
That’s David Cole. He heads the Center for Automotive Research. He says some people have
shied away from hybrids because they’ve only been available as small cars, and others have been
wary of the new technology. But mostly, Cole says a lot of people aren’t willing to pay more for
“Where it is going to be in the future is dependant on one thing in my judgment and that is
economics. Can it be done at a cost that consumers will pay for?”
So far, Toyota, Lexus and Ford aren’t saying what their new hybrids will cost. Right now a new
hybrid Honda Civic costs about two-thousand dollars more than the most expensive gasoline
model. The federal government offers a tax deduction to hybrid-buyers to help close that gap, but
it is being phased out during the next few years. Some automakers and environmental groups say
it’s not enough anyway. They want Congress to pass a federal tax credit for people who buy
David Friedman is with the Union of Concerned Scientists. He says the automakers’ decision to
offer hybrid engines in more models is an opportunity for the country to become less dependant
on imported oil – if enough people can be persuaded to buy the vehicles.
“If automakers put some of their 10-to-15 billion dollars of advertising muscle behind this, and if
the government is willing to get these tax credits out there, I think we can see hybrids grow into a
significant portion of the market.”
Back at the auto show, Jerry Bissi says he’d consider buying a hybrid SUV. He says he thinks
others will too, if the price is right and they prove to be reliable.
“I think there are a lot of people sitting on the fence. They’re going to watch the first one, see
how it does. If it does prove to be good, they’ll jump on the bandwagon and be late joiners.”
Buyers might need some convincing, though. On this afternoon at the auto show, Ford’s hybrid
version of the Escape SUV drew only a few visitors compared to the crowds surrounding the
standard gasoline-engine Escape and the company’s larger Explorer SUV.
For the Great Lakes Radio Consortium, I’m Michael Leland.