Automakers and Politicians Seek Green U.S. Tax Breaks

Washington DC May 2, 2007; The AIADA newsletter reported that state and federal lawmakers are looking to use tax incentives to prod Americans into buying, and the automakers into building, more fuel-efficient vehicles.

The Detroit News reports that DaimlerChrysler Vice President Mark Chernoby called on Congress yesterday to broaden tax credits to include all diesel vehicles, not just those that meet new strict 2009 emissions standards. "Introduction of diesel passenger vehicles and light trucks would establish an altogether new market for biodiesel and renewable diesel," Chernoby said.

At the same time, automakers want Congress to broaden some existing hybrid tax breaks, including lifting the cap on the number of hybrid vehicles per manufacturer that are eligible for income tax breaks. Toyota has hit the 60,000 vehicle-per-manufacturer cap on the full $3,150 tax breaks for hybrids. After April 1, Prius buyers only get 25 percent of the tax credit; on Sept. 1, it's set to expire completely.

U.S. Sen. Jeff Binagaman, D-N.M, the chairman of the Senate committee that heard testimony Tuesday, said Congress should move away from picking a technology, instead setting a "performance-based standard."