Tax credits for PHEVs: Waste of time?

What about today's hybrid vehicles?

The US House of Representatives has passed the Renewable Energy and Energy Conservation Tax Act of 2008, H.R. 5351 that, if enacted, would provide tax credits for plug-in hybrid vehicles. The base credit would be worth $4000 for PHEVs with at least a 5 kWh battery pack. An additional $2000 in credits could be claimed by those with larger battery packs. Each kWh beyond 5 is worth an extra $200, up to an extra $2000.

The only problem, where are the plug-in hybrid vehicles?

Such a credit might push a few more hybrid owners towards converting their hybrids into plug-in hybrids, but wouldn't the best path towards PHEVs and significantly more fuel efficient vehicles be getting as many hybrid cars on the road today? Wouldn't tax credits for the Toyota Prius, for example, make more automakers address Prius success today, not 2 years from today?

CAFE? Whatever! Give me hybrid tax credits today!

Today's hybrid cars are the quickest way to plug-in hybrids

A number of the candidates running to be the next President have done a lot of talking about foreign oil dependency, but have offered few actual details other than CAFE, funding for battery research and ethanol.

Sadly, a number of the candidates also have jobs in Congress and they have not done anything about extending Toyota's and Honda's hybrid vehicle tax credits. Sure, putting many more hybrid cars on the road won't significantly reduce foreign oil dependency immediately, but it will significantly increase battery research and competition to create cost effective, fuel efficient technologies, such as plug-in hybrid vehicles.

CAFE? Blah, blah, blah. Give me something now! Why do politicians always talk about what they can do tomorrow, without doing ANYTHING today? As I stated in my earlier post on the hydrogen highway, politicians have no real vision for the future of America - it's all soundbites.

Walking the walk just isn't a requisite requirement for today's politicians.

Hybrid trucks: More proof its time to fire Congress?

FedEx would go hybrid crazy - with government help

So, tax credits for Toyota's hybrid vehicles are completely expired. Yet, even though a Rand study has shown that hybrids provide far more social benefits than E85, government subsidies for corn-based ethanol continue to increase. Who cares that hybrid tax credits could help put millions of fuel efficient, socially-beneficial hybrids on the road while encouraging technological competition and making the technology cheaper for even millions more buyers?

Sadly, the government isn't just blowing it on small hybrids, but on large hybrid trucks and buses.

"If we can get hybrid trucks at the same premium that hybrid cars are at ... the manufacturers will be able to sell as many as they can make," John Formisano, vice president for global vehicles of package delivery company FedEx, told Reuters.

Congress still provides large, uncapped tax credits for small businesses to buy the worst gas-guzzlers on the market, but it can't help large businesses save millions, even billions, of gallons of fuel? What's wrong, not enough pork?

Hybrid interest dropped in 2007?

J.D. Power says interest in hybrids dropped in 2007

The DetroitNews is reporting that interest in hybrid cars has dropped 7 percent in 2007. "In the 2006 study, we found consumers often overestimated the fuel-efficiency of hybrid electric vehicles, and the decrease in consideration of hybrids in 2007 may be a result of their more realistic understanding of the actual fuel economy," said Mike Marshall, director of automotive emerging technologies at J.D. Power.

Ironically, as interest in hybrids supposedly dropped, and as Toyota hybrid tax credits have been reduced to almost nothing, the Toyota Prius has become one of the top 10 best selling cars in America as 2007 Prius sales have pummeled 2006 sales. Likewise, the Camry hybrid has seen stellar first year sales.

Somehow, I think this study is missing something.

Large SUV tax break almost over?

So, you need a Hummer to sell real estate?

There is another move in Congress to end the $25,000 tax deduction available to small business owners to buy the largest SUVs - those weighing over six thousand pounds.

It's amazing this deduction has survived this long with all the rhetoric coming out of Washington regarding foreign oil dependency and global warming. Hopefully, the tax deduction can be retooled to reward small business owners whom buy hybrid cars and other clean vehicle technologies.

Then again, we are talking about Congress and politicians here.

New hybrid tax credits only for plug-in hybrids?

No new tax credits for regular hybrids?

I have to hand it to Congress. Only Congress can create a lot of buzz while actually doing nothing, such as is with the proposed tax credits for plug-in hybrid vehicles (more).

Now, I'm as big a fan as any regarding plug-in hybrid vehicles, but America can't get enough buyers into conventional hybrid cars. So, how can tax credits for plug-in conversions accomplish anything?

The biggest seller of hybrids, Toyota, is facing the end of any tax incentives for buyers of Toyota hybrids, including the best selling Toyota Prius. With better tax incentives, imagine how many more Prii, Camry hybrids and Highlander hybrids would be selling.

Moreover, if there are not enough hybrids on the road already, how is converting a small percentage of them into plug-ins going to accomplish anything other than buzz among politicians, celebrity-advocates and a handful of rich treehuggers?

I say extend Toyota's tax credits first. If the Prius becomes the best selling car in America because of tax credits, so be it. Millions and millions of 45 mpg hybrids on the road is a good start and it is probably the fastest way to more hybrid competition amongst automakers, as well as the fastest path to mass-produced plug-in hybrids.

I mean, c'mon. How many Americans can really afford to buy a Prius and spend another $10,000 to convert it into a plug-in hybrid that voids the battery warranty? Move forward with the plug-in tax incentive, but not without extending Toyota's tax credits or making larger tax incentives for all hybrid buyers.

Mazda Tribute hybrid tax credits announced

Coming later this year?

The Mazda Tribute hybrid will qualify for a $3000.00 clean vehicle tax credit, according to the IRS. However, if you purchase the 4-wheel drive version of the Tribute hybrid, then that vehicle will only qualify for a $2,200 tax credit.

(Source: Car&Driver)

Tax incentives: Biofuels versus hybrid vehicles

Extended tax credits for Toyota hybrids?

When it comes to the energy package that will eventually make its way out of Congress, expect significant incentives for biofuels, but little for hybrid vehicles, according to some analysts.

"Later this year, when lawmakers finish dealing a new hand in the energy legislation game, the biofuels industry will clearly come up with the aces," states Jim Ostroff in Kiplingers recently.

Why no new incentives for hybrid cars? Well, mostly because Toyota is the one with the most to gain. GM and Chrysler, for example, still have not sold one full hybrid. Thus, since Congress capped the incentives by manufacturer, new incentives would really only help Toyota, since every other automaker is still sitting on a large supply of credits.

Good old government inspired competition? I understand the desire to try to get all automakers involved with such technology, however, shouldn't the government also be trying to get as many as-fuel-efficient-as-possible vehicles on the road?

Prius top selling Toyota vehicle at some dealers

A hidden gem at NAIAS?

Despite a severely reduced hybrid tax credit, the Toyota Prius is now the top-selling vehicle at some Toyota dealers, according to my sources at more than one Toyota dealership in Southern California.

Often Southern California is the barometer of U.S. auto trends. If this is true regarding the Prius and hybrid cars - the Camry hybrid is also a hot seller in SoCal - imagine the sales potential of the third generation Prius.

What would all the hybrid vehicle critics say if the Prius became the best selling vehicle in America?

Toyota hybrids post record sales in May

The Camry hybrid was also hot

Ouch! That's all I can say regarding the sales of the Toyota Prius hybrid car this May.

With a tax credit that has been cut in half, then cut in half again, one might have expected a bit of a drop in the sales of Toyota's hybrid vehicles, or at least some stagnation. Instead, Toyota posted its BEST EVER month of Prius sales, selling some 24,009 Prius vehicles - almost equaling the total sales of Toyota's entire Lexus division.

----> Finish: Toyota hybrids post record sales in May

Want an Altima hybrid, but its not available where you live?

Just gotta have one?

I've received a few e-mails from some hybrid car buyers that decided to purchase a Nissan Altima hybrid, rather than a Toyota Prius, simply for the Altima's full tax credit compared to the almost expired, significantly reduced, tax credit on Toyota's hybrid vehicles.

I can see the sense in that.

Yet, Nissan is only selling the hybrid version of the Altima in just 8 states; California, Connecticut, Maine, Massachusetts, New York, New Jersey, Rhode Island, and Vermont. Not all potential Altima hybrid buyers live in these states. So, many are driving hundreds of miles to buy one.

So, where will these 'out-of-area' Altima hybrids be serviced?

Nissan is warning Altima hybrid buyers outside of the 8 states where Nissan is selling the hybrid vehicle, that servicing outside of these 8 states will be very limited and might include several days of delay.

Hybrid tax credit, servicing hassles, tax credit????

Hybrid tax credits - Give me something to believe in Barack

Time to give Toyota some credit!

Congress sucks. Numerous Democrats and Republicans have been speaking about foreign oil dependency and global warming for at least a couple of years now, yet they've done little, despite the fact that a majority agree action is necessary.

O.K. Forget the past.

Barack Obama has now claimed that if he becomes President, he's going to push and to help U.S. automakers to develop hybrid cars. In addition, he also wants to change the tax credit for hybrid vehicles so that there is no cap by manufacturer - something Obama has also proposed as a legislator.

So, what are we waiting for? Foreign oil dependency and global warming are important, but not important enough .......(more).

Congress lobbied to lift hybrid tax credit cap

A123 Systems and Tesla both lobby Congress for help

A horde of auto-orientated lobbyists asked Congress for help yesterday with a number of clean vehicle and clean fuel technologies. Included in that lobbying was a request to remove the cap on hybrid tax credits, which was set at 60,000 hybrid vehicles per manufacturer. Consequently, the leading selling of hybrid cars, Toyota, is already down to a reduced credit that will soon expire completely. Most automakers, on the other hand, have yet to sell one full hybrid.

A123 Systems also lobbied Congress for help in its quest to develop plug-in hybrid vehicles, as did Tesla Motors regarding fully electric vehicles. (more)

Hybrids and Biofuels: Forget the Politicians?

Does it really matter which Party is in control?

If you ask me, competition works better than politicians. I'm not saying competition works perfectly, but it works better than a bunch of rich, special interest-funded partisan politicians.

Consequently, I've been very bothered that Congress has not extended Toyota's hybrid tax credits - something both Republicans and Democrats have ignored. Yet, in the last couple of years, both parties have talked considerably about energy dependence, especially foreign oil dependence and/or global warming. Yet, very little has been accomplished to alleviate these problems.

Obviously, the task is not simple. Still, it seems to me that the quickest way to make automakers deal with fuel efficiency is simple competition. Force them to act or risk losing customers.

Thus, the more success Toyota has selling hybrid vehicles, the more pressure there is.....Finish Hybrids and Biofuels: Forget the Politicians.

Democrats suck: Why no Toyota hybrid tax credits? (Does America suck?)

Is leaving Iraq a solution or a distraction?

While Democrats keep beating the Leave Iraq drum, they continue to do little to resolve the problem that eventually pushed America into Iraq in the first place: oil. While there isn't anything that can be done to immediately end foreign oil dependency, there are small actions that create strong messages that could result in real action. Extending Toyota's tax credits is one such action.

Besides, Toyota deserves the extension. Hybrid cars, plug-in hybrid vehicles - these vehicles wouldn't even be on the world's radar if not for Toyota. Even today, the Big 3 - led by GM - can't get off the ethanol crazy train. Fortunately, even the mainstream media are finally starting to address the truth about flex-fuel vehicles and corn-based ethanol - its a scam (See BW).

--> Finish Democrats suck: Why no Toyota hybrid tax credits

Toyota hybrid tax credits and Democrats

Why haven't Dems taken any action?

Many Democrats in Congress have made global warming one of their most important political issues - at least in terms of political speech. Yet, political action is still lacking.

Most of these hard-talking Democrats and some Republicans have demanded tough increases in fuel economy that could severely threaten the viability of U.S. automakers. Fine. This is an important issue and tough action will be required. Nonetheless, tough talk and little action accomplishes nothing.

Finish Toyota hybrid tax credits and Democrats

Toyota tax credits set for another reduction

Are you in the market to buy a hybrid?

Have you been out shopping for hybrid cars recently? If so, then you know there are some pretty good deals being offered on hybrids. For Toyota hybrids, the deal might never be sweeter. The current tax credits offered on Toyota hybrids are set to again be cut in half in April. So, if you were thinking about a new Prius, Camry hybrid or Highlander hybrid, you might want to act now.

Gas prices primed to skyrocket?

Another hurricane could blow hybrid vehicle sales much higher

Oil prices are back up over $60.00 per barrel, and those prices could easily continue to trend higher, rather than lower. Yet, the spring and summer driving season hasn't even begun to heat up. Unfortunately, the tension in the Middle East, on the other hand, only continues to boil as the U.S. and Iran engage in Persian Gulf war exercises. In addition, there is an election coming up in Nigeria that could dramatically escalate violence there if rebels feel cheated. Still, aside from all the geopolitics threatening the price of oil, one good storm in the Gulf of Mexico could make $70 oil and $3.00 gas, seem like the good ole days.

So, if you've been checking out hybrid cars, but you've felt a little unsure of your investment, don't worry. Oil prices appear primed to keep your investment quite secure. Now, if we could just get Congress to extend tax credits for Toyota hybrids.

Why tomorrow's hybrid buyers should support extending today's hybrid tax credits

Today's hybrid success drives tomorrow's hybrid technology

"I'm not going to buy a new vehicle until I can buy a plug-in hybrid vehicle," is a statement I often hear.

Of course, I understand this sentiment. Yet, there are still many potential plug-in hybrid consumers whom need a car today. For these buyers, it is essential that they buy one of today's hybrid cars. Inevitably, the more success today's hybrids achieve, the faster tomorrow's hybrids - and plug-in hybrid vehicles - will become reality.

Hybrid tax credits are key to this process.

Consequently, even for those unwilling to buy any vehicle until plug-in hybrids are available, it is essential that they support today's hybrid vehicle tax credits. In addition, it is especially important that they also support extending and uncapping the current tax credit, or lack thereof, for Toyota's hybrid vehicles.

--> Read the rest of Why tomorrow's hybrid buyers should support extending Toyota's hybrid tax credits

Hybrid tax credits: Why Congress still sucks

Automakers, especially America's Big 3, claim increasing CAFE is just too expensive. Apparently, ending foreign oil dependency just doesn't matter.

Nonetheless, in an effort to give automakers a little nudge, Congress created tax credits for hybrid cars and other clean technologies. Quite quickly, Toyota used all of their full tax credits. GM and Chrysler, on the other hand, have yet to sell one full hybrid.

Is that the sign of successful legislation?

Even with reduced tax credits, Toyota will probably sell more than 150,000 Prius hybrid cars this year. In all, Toyota might sell a quarter million hybrids in the U.S. in just 2007. Yet, how many more hybrid cars could Toyota sell if consumers still qualified for the full tax credit?

Extending tax credits for Toyota's hybrid cars isn't going to force the bankruptcy of American automakers. Extending tax credits for Toyota's hybrid cars will, however, force American automakers to take foreign-oil-dependency-reducing technologies much more seriously.

Besides, won't such competition be required to make a serious increase in CAFE possible? Or, is all this CAFE political buzz just another Congressional game?

Consumers are key to gasoline dependence

Automakers claim gas-guzzling consumers are key

Can America achieve gasoline dependence? Not for many decades according to automakers. Quite simply it would probably take a decade just to replace America's new fleet with fuel efficient hybrid cars, clean diesels, etc. Right now, however, not enough hybrids are available, nor is there enough consumer interest in purchasing hybrids or clean diesels according to automakers.

Of course, I bet this would significantly change if there were more hybrids available in more segments, such as hybrid trucks. Also, pricing is hugely important, which underscores the vital necessity of extending and uncapping tax credits for hybrid cars.

Ultimately, if America is going to take foreign oil dependency and global warming seriously, it's going to be up to consumers and politicians - not automakers - to make it happen.

What's the problem? Congress, Hybrids and Clean Vehicle Tax Credits

Is Bush more green than Congress?

President Bush is certainly not going to win any awards for being the greenest President. Still, for at least 6 months the President has asked Congress to extend tax credits for hybrid vehicles. Yet, Congress has done nothing.

Sure, GM and DaimlerChrysler have not sold any full hybrid vehicles and are sitting on more than 100,000 full tax credits, while Toyota has already used every full tax credit. So, why should Congress do something that only benefits Toyota?

Because foreign oil dependency and global warming demand action now, not tomorrow, and not after a global warming committee is formed. NOW. Members of Congress have talked a lot of tough talk regarding global warming and foreign oil dependency, but they've taken very little real action.

Power to the People

Raise fuel economy by raising CAFE, Congress tells us. Fine. Do it. Automakers, however, will still need financial incentives. So, why not get started right now? Extend and uncap the tax credits for hybrid cars, and put those financial incentives into the hands of consumers, rather than executives more beholden to shareholders than to citizens and to consumers.

--> Read the rest of Congress, hybrids and clean vehicle tax credits

Hybrid Vehicles Dead? Toyota Prius sales soar in January

Are hybrid vehicles losing their appeal?

Despite lower gas prices and a federal tax credit that was reduced by 50 percent, the Toyota Prius had its best January on record, selling 8,299 units. The Camry hybrid posted sales of 2,801 units, the Highlander hybrid reported 1,810 sales, while the Lexus RX400h reported 1,245 units sold.

So, if Toyota sold more than 14,000 hybrid cars in January with only a reduced tax credit, how many more would Toyota have sold if it still qualified for the full tax credit? Considering the seriousness of foreign oil dependency, pollution and global warming, it is simply silly that Toyota is being punished for being too successful doing the right thing.

--> More on Hybrid vehicles dead? Prius sales soar in January

What? You don't qualify for your hybrid tax credit?

So, you bought a Toyota Prius because you wanted to help the environment? Of course the car pool lane access and the $3150.00 in tax credits helped in your decision as well, right?

Well, hold on. According to Hybrid tax credit bait and switch, you might not qualify for your tax credit on the Prius, or any of the other hybrid cars that qualify for the hybrid tax credit.

"Few Californian families with income between $150,000 and $500,000 will qualify for a penny of the credit. And under this bizarre legislation, at lower income levels, the smaller your family, the bigger the credit allowed. Likewise, single taxpayers will mostly be OK."

Obviously, those making more than $150,000 per year can handle this news better than those making only $50,000. While I understand the writer's consternation, there were a lot of crazy things about the hybrid tax credit, such as why are U.S. automakers sitting on more than 150,000 tax credits as Toyota's tax credits expire? Isn't the point to get as many hybrids on the road as possible?

Congress!?!?

The 'Admiral' calls 20 percent U.S. gas reduction impossible

Eric Bolling, known as the Admiral on CNBC's Fast Money, was on Morning Call this morning talking about oil prices. Consequently, he was asked about the President's State of the Union Speech and whether a 20 percent reduction in U.S. gasoline production was possible. He adamantly exclaimed that it was not possible, that ethanol would ultimately have little effect on gasoline consumption, and that the U.S. would be lucky if it could maintain its current gasoline consumption - rather than increase it as the U.S. seems to do year after year. Scary.

While Bolling might be correct, and based on his success he's hard to argue against, I think the U.S. must try. More important, I think it is desperately vital that the U.S. and consumers realize that alternative fuels, other than possibly hydrogen, are not going to be the answer. Fuel efficient technology, namely hybrid vehicles that can evolve into plug-in hybrid vehicles are absolutely critical.

I think it's even more evidence we need a gas-tax to clean energy tax credit policy.

Isn't it time to give Toyota the Big 3's hybrid tax credits?

Give the Prius some credit

In advance of the President's State of the Union speech, Big 3 automakers are using the Auto Show circuit to show Congress and the President that they can be fuel efficient. Ford announced 20 flex fuel hybrids and a $2,000,000 hydrogen plug-in hybrid. DaimlerChrysler showed off the most fuel efficient, clean diesel heavy duty Ram pickup truck, and GM debuted the Chevy Volt concept at NAIAS.

Wow, I guess Detroit gets it, huh?

Well, why then are the Big 3 sitting on more than 150,000 tax credits available for hybrid vehicles as Toyota's hybrid tax credits expire because they sold too many hybrids? Why do we punish Toyota's clean and fuel efficient success and protect Detroit's complacency? Is this really how you drive innovation? How about some good old American competition?

As I blogged earlier today, it's time to put tax incentives into the hands of the people rather than the corporations. Give the people the money to afford hybrid vehicles and other clean technologies and to reward whoever makes the hybrids consumers want.

While I desperately want the Big 3 to succeed, it's time for real world vehicles, not fancy concepts and $2 million one-offs.

State of the Union and Energy Independence: Power to the People!

Power to the people, not the corporations!

Energy independence is supposed to be an important part of the President's State of the Union speech tonight. So, when it comes to energy independence, where should the government place its tax incentive focus? Should it be on alternative fuels such as ethanol, bio-diesel, clean diesel and hydrogen? Should it be on advanced technologies such as hybrid vehicles, lithium-ion batteries, and fuel cells?

I say forget fuel. Forget ethanol. Ethanol already receives an incredulous amount of tax subsidies and is in danger of turning into a pork-barrel legislator's dream.

I say focus on hybrid vehicles, electric vehicles and lithium-ion battery technology. Let's invest in the kinds of technologies that can practically wipe out the need for any liquid fuel in just the next decade.

Of course not everyone will agree on the approach. Consequently, I say try to give the power to the people, and let's make the people accountable for their choices.

Yesterday, I suggested a gas tax. Why not make gas more expensive while using the gas tax revenue to reward consumers whom buy more fuel efficient technologies? Also, make that tax 85% less for E85, for example - let consumers reap the benefit of buying a flex-fuel vehicle if it works for them. Why should automakers receive CAFE credits - a tax saving loophole - for selling E85 functionality that is never used by the majority of consumers? In addition, empower the flex-fuel user to save even far more with a flex-fuel hybrid vehicle.

I say give the power to the people! It's fair, it's competitive, it's responsible.

A gas tax to fund hybrid vehicle tax incentives?

Let gas-guzzlers fund hybrid tax credits?

It is not very common to hear support for a gas tax coming out of Detroit, but that is exactly what Daniel Howes is supporting in his DetroitNews column today.

"We Americans can have the collective attention span of 4-year-olds -- we want what we want when we want it and complain loudly when we don't get it," Howes begins his commentary as he ridicules consumers and "politicians-cum-nannies" whom have tried to blame everyone but gas-guzzling consumers for high gasoline prices.

Yet, once prices hit $3.00, consumer behaviour changed rather quickly, which is exactly why, Howes argues, that a gas tax - not the vilification of oil companies via taxes, etc. - would be the "quickest, if not the wisest, way to cut fuel consumption and change behavior".

Unfortunately, that's probably political suicide, even if it is the right thing. Inevitably and ultimately politicians are far more focused on maintaining power than on doing the right thing - but that's a whole other sad story.

Automakers and oil companies deserve blame, but consumers deserve at least as much blame. I think a gas tax is a great idea - as long as every cent of the tax incentive is given back to consumers whom buy hybrid cars and other clean energy technologies.

Nissan Altima hybrid tax credit approved

The federal tax credit for the Nissan Altima hybrid has been determined by the IRS. The full credit for qualified consumers will be $2350. However, in order to qualify for the full tax credit, consumers will have to purchase the 2007 Nissan Altima hybrid by the end of March. Those whom buy the Altima hybrid between April and the end September will only receive half that credit, or $1175. During the last quarter of the year, the credit will be reduced to $587.50 (more).

Is the Federal hybrid tax credit protectionist, anti-capitalistic, anti-American legislation?

Why not help Toyota produce as many hybrid cars as possible?

GM's future is now the Volt and even though GM doesn't like to admit it, the Volt is a hybrid vehicle. Consequently, the near future is ALL ABOUT hybrid vehicles - at least if you care about the environment or foreign oil dependency.

Every other automaker in the world will either have to develop hybrid cars, or something far better, or the world can to wait 20 to 30 years for the possibility of fuel cells and hydrogen.

Why? Why isn't America putting as many hybrid vehicles on the road as possible?

(Read Is the Federal hybrid tax credit protectionist, anti-capitalistic, anti-American)

Toyota wants extended tax credits, other automakers fearfully say no

Toyota wants tax credits for hybrid vehicles extended, citing a drop in the sales of its hybrid cars corresponding to the reduction in the credit. Other automakers, aren't as certain. Honda, for example, called hybrids only a bridge to another technology and would prefer tax credits for hydrogen fuel cell vehicles. (more)

Hydrogen fuel cell vehicles? The same hydrogen vehicles that BMW just claimed are 30 years away from mass-production reality? What happened to Honda, the environmental leader? Yes, Honda developed its hybrids as a bridge to another technology, but their bridge is lost in the fog right now. Toyota, on the other hand, is developing its hybrid cars as an integral part of the path to fuel cell vehicles.

One battery break-through and hybrids could become twice as efficient as today. Moreover, they could be converted into plug-in hybrids for even greater fuel efficiency. In fact, with just one good battery innovation, electric vehicles - never powered by a fuel cell or hydrogen - might be the future.

Yes, extending the tax credit will further empower Toyota, but letting the credit slide will lull many automakers back into the 'maintaining the status quo' mentality that created the problems of foreign oil dependency and global warming in the first place.

Let's drive competition. Let's extend tax credits for hybrid vehicles.

More momentum gaining in Congress for increasing CAFE

"There is a dangerous amount of momentum" in Congress behind tougher corporate average fuel economy regulations, General Motors Corp. Vice Chairman Bob Lutz said Tuesday at the North American International Auto Show. (more)

Of course, what costs will Congress be willing to accept to achieve an increase in CAFE? Will Congress risk tens of thousands of more auto jobs in Detroit to increase CAFE? That seems like political suicide.

Regardless, I say before Congress increases CAFE, extend tax credits for hybrid vehicles. Also, make buying a hybrid part of the small business tax credit. Give American companies some R&D money to develop lithium-ion technologies - the kind of technologies that have the ability to make any proposed increase in CAFE child's play.

--> More on increasing CAFE

Toyota sees huge hybrid growth in 2007

Toyota is hoping to leave all other automakers in the rear view mirror when it comes to hybrid vehicles. According to Just-Auto, Toyota "plans to sell 250,000 to 300,000 hybrid cars in the US in 2007, up from 192,000 in 2006."

With gas prices dropping, are such sales figures a reality, especially when Toyota's reduced hybrid tax credits are considered?

I hope Toyota is correct, and I hope that Congress extends the tax credit for Toyota hybrids. Toyota's success has made all automakers take another look at hybrid technology and serious competition is brewing. Congress should help keep it brewing by ensuring that hybrid technology remains accessible to consumers - regardless of automaker and regardless of dipping gas prices.

This Toyota FT-HS hybrid concept, pictured above, demonstrates what hybrid investment can accomplish, and this is just the beginning.