Well hybrid fans, it is official. The IRS this week announced that the day of reckoning had come for Prius buyers: Toyota has made too many of the darn things and now the tax credit starts to fade away. To be completely accurate, the the credit falls away for ALL Toyota hybrids, not just Prius, but of course everyone's favorite gas-sipping ovoid is the main culprit in Toyota's success in reaching the 60,000-unit of sales point -- thus triggering the demise of the credit. To quote the tax guys:
"Under the current tax law, the credit for buying a hybrid vehicle begins to phase out during the second calendar quarter after the quarter in which the company sells its 60,000th hybrid or lean burn technology vehicle."
Some observers have asserted that this limit is calculated to tilt the playing field against the to-date hybrid champion, in that other manufacturers (e.g. Ford) are in no risk of hitting the 60,000 number, and therefore will be able to offer buyers all 100% of the credit. Whether that is true or not is not for us to say, but it is a shame that such a mixed message is being sent. Uncle Sam seems to be encouraging hybrid sales --- just not too many of them!