Tax Credits for Heavy-Duty Hybrids

The energy bill provides tax credits for heavy-duty hybrid vehicles in the period January 1, 2006 through December 31, 2009. The credit amount depends on the weight class of the vehicle, its fuel economy relative to a comparable conventional vehicle, and the incremental cost.

A hybrid vehicle's incremental cost is defined as the amount by which the manufacturer's suggested retail price of the hybrid exceeds that of a "comparable" vehicle; but it is capped by class:

The fraction of the incremental cost (up to the maximum allowed) that the credit will cover is determined by the improvement in city fuel economy:

So, for example, the most efficient 20,000-pound hybrid truck could receive a credit of $6,000.

The vehicle must also meet a threshold value of "maximum available power," a measure of the percentage of total vehicle power available from the rechargeable energy storage system of the vehicle. For a vehicle of 8,500 to 14,000 pounds GVW, the requirement is 10 percent maximum available power; over 14,000 pounds, the requirement is 15 percent. This is to ensure that a qualifying vehicle incorporates substantial hybrid technology. The language does not specify the type of hybrid; both electric and hydraulic hybrids, for example, may qualify.