Government incentives for fuel efficient vehicles in the United States
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Energy Policy Act of 2005 The Energy Policy Act of 2005 () is a federal law signed by President George W. Bush on August 8, 2005, at Sandia National Laboratories in Albuquerque, New Mexico. The act, described by proponents as an attempt to combat growing energy problems ...
established a federal income
tax credit A tax credit is a tax incentive which allows certain taxpayers to subtract the amount of the credit they have accrued from the total they owe the state. It may also be a credit granted in recognition of taxes already paid or a form of state "disc ...
of up to $3,400 for the purchase of new
hybrid vehicle A hybrid vehicle is one that uses two or more distinct types of power, such as submarines that use diesel when surfaced and batteries when submerged. Other means to store energy include pressurized fluid in hydraulic hybrids. The basic princip ...
s, purchased or placed into service after December 31, 2005. Vehicles purchased after December 31, 2010 are not eligible for this credit. The law limited the tax credits to the first 60,000 eligible vehicles per carmaker, meaning that credits for popular models will be phase out before the tax break's scheduled expiration date. Note these are credits — dollar for dollar tax savings — not merely deductions. The tax credit is to be phased out two calendar quarters after the manufacturer reaches 60,000 new cars sold in the following manner: it will be reduced to 50% if delivered in either the third or fourth quarter after the threshold is reached, to 25% in the fifth and sixth quarters, and 0% thereafter. The
Internal Revenue Service The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory ta ...
is responsible for certifying that certain passenger autos and light trucks qualify for the credit and the amount of the credit. Some state governments in the U.S. have introduced special provisions for hybrid vehicles driving in
carpool Carpooling (also car-sharing, ride-sharing and lift-sharing) is the sharing of car journeys so that more than one person travels in a car, and prevents the need for others to have to drive to a location themselves. By having more people usi ...
(HOV) lanes.


Tax incentives


Energy Policy Act of 2005

The
Energy Policy Act of 2005 The Energy Policy Act of 2005 () is a federal law signed by President George W. Bush on August 8, 2005, at Sandia National Laboratories in Albuquerque, New Mexico. The act, described by proponents as an attempt to combat growing energy problems ...
created incentives to encourage the purchase of low emission vehicles. The
Energy Independence and Security Act of 2007 The Energy Independence and Security Act of 2007Pub.L. 110-140, originally named the Clean Energy Act of 2007, is an Act of Congress concerning the energy policy of the United States. As part of the Democratic Party's 100-Hour Plan during the ...
expanded these incentives to include emerging electric vehicle, and plug in hybrid, technology. The
Energy Improvement and Extension Act of 2008 Public Law 110-343 () is a US Act of Congress signed into law by U.S. President George W. Bush, which was designed to mitigate the growing financial crisis of the late-2000s by giving relief to so-called "Troubled Assets." Three divisions ...
only acted to push back tax credit-claiming deadlines and include more electric vehicles in existing incentive programs. Many speculated that more recent stimulus legislation would greatly expand existing incentive programs, but the legislation failed to include such provisions. When passed, the
American Recovery and Reinvestment Act of 2009 The American Recovery and Reinvestment Act of 2009 (ARRA) (), nicknamed the Recovery Act, was a stimulus package enacted by the 111th U.S. Congress and signed into law by President Barack Obama in February 2009. Developed in response to the Gr ...
focused more on
green infrastructure Green infrastructure or blue-green infrastructure refers to a network that provides the “ingredients” for solving urban and climatic challenges by building with nature.Hiltrud Pötz & Pierre Bleuze (2011). Urban green-blue grids for sustainab ...
than personal transportation incentives. The act did allocate money, however, to equip government agencies with more efficient vehicles, created a grant program for diesel owners wishing to outfit their cars with cleaner burning technology, and added a significant tax incentive program for plug-in hybrids. The tax incentives that are the result of the Energy Policy Act of 2005 are offered to make pricier, but more environmentally friendly vehicles more appealing. Because the process of manufacturing many
low emission vehicle A low-emission vehicle is a motor vehicle that emits relatively low levels of motor vehicle emissions. The term may be used in a general sense, but in some countries it is defined in air quality statutes. Different groups of people ("go greens", " ...
s (LEV), for example, a
hybrid engine A hybrid vehicle is one that uses two or more distinct types of power, such as submarines that use diesel when surfaced and batteries when submerged. Other means to store energy include pressurized fluid in hydraulic hybrids. The basic princip ...
, is more technology intensive, and therefore more expensive, than the process of manufacturing a standard
gasoline engine A petrol engine (gasoline engine in American English) is an internal combustion engine designed to run on petrol (gasoline). Petrol engines can often be adapted to also run on fuels such as liquefied petroleum gas and ethanol blends (such as ''E ...
, the up-front cost of a hybrid automobile is greater than that of a car with comparable performance. Many potential buyers will require economic incentive to purchase a more expensive LEV over an automobile that runs on gasoline, so a tax credit is offered to effectively cheapen the LEV and encourage the purchase of more environmentally friendly automobiles. The characteristics and availability of an offered tax credit will vary based on the characteristics and popularity of the car in question, respectively. The size of the offered tax credit typically corresponds in value to the amount of money that the technology in question adds to the manufacture price of the car. For example,
hydrogen fuel cell vehicles A hydrogen vehicle is a vehicle that uses hydrogen fuel Hydrogen fuel refers to hydrogen which is burned as fuel with oxygen. It is zero-carbon, provided that it is created in a process that does not involve carbon. It can be used in fuel cells o ...
that are in the early stages of development are more expensive and receive a larger tax credit than a
diesel Diesel may refer to: * Diesel engine, an internal combustion engine where ignition is caused by compression * Diesel fuel, a liquid fuel used in diesel engines * Diesel locomotive, a railway locomotive in which the prime mover is a diesel engin ...
car that is cheaper to make. Existing incentive programs are also set to phase out after a given maker sells 60,000 hybrid vehicles, so more popular models like the
Toyota Prius The is a car built by Toyota which has a Hybrid vehicle drivetrain, hybrid drivetrain, combining an internal combustion engine with an electric motor. Initially offered as a four-door Sedan (automobile), sedan, it has been produced only as ...
are no longer subject to a tax credit. Incentives may also vary based on how well the car in question performs in these “green” categories. For example, the buyer of a Tesla Roadster, a fully electric vehicle, will receive a much larger tax credit than the buyer of a standard hybrid, which will pollute much more during its lifespan. The federal government now lists models that are pre-approved to receive a tax credit; some other models may qualify on an ad hoc basis.


US Department of Energy's Tax Credit Requirements

The Department of Energy has specific requirements that car manufactures must meet, in order to receive tax credits from the government. * The Vehicle must be made by a manufacturer, and cannot be a previously purchased vehicle that has been converted into a Hybrid. * The Vehicle must be treated as a motor vehicle for it to fall under title II of the clean air act. * The Vehicle must be propelled to a significant extent by electricity. Must have a battery with the capacity of 4 kilowatt hours or more. The battery must also be capable of being recharged from an external source of electricity. Vehicles that have already been certified can qualify for the tac credit by meeting these additional requirements. * The vehicle must be new, and the original use for the vehicle by the taxpayer receiving the credit should not change. * The tax credit will only be given to the original purchaser of the vehicle, and not to a secondhand owner. If the vehicle is being lease, the tax credit can be claimed by the leasing company alone. * The vehicle must be used mostly in the United States. * The vehicle must be placed in service by the taxpayer by 2010 or later.


Classifications for tax credit certified vehicles

* Diesel: Because diesel engines are typically more
fuel efficient Fuel efficiency is a form of thermal efficiency, meaning the ratio of effort to result of a process that converts chemical potential energy contained in a carrier (fuel) into kinetic energy or work. Overall fuel efficiency may vary per device, wh ...
, and can run on cleaner blends of diesel fuel, diesel powered car buyers qualify for federal tax credits. Many
Volkswagen Volkswagen (),English: , . abbreviated as VW (), is a German Automotive industry, motor vehicle manufacturer headquartered in Wolfsburg, Lower Saxony, Germany. Founded in 1937 by the German Labour Front under the Nazi Party and revived into a ...
diesel models are currently pre-approved for a tax credit of between $1,000 and $1,700. Because diesels are less common in the U.S. than standard gasoline cars, there are many more remaining tax credits for these Volkswagen models than there are for popular hybrid models like the Toyota Prius. * Alternative fuel vehicles: Currently the only pre-approved alternative fuel vehicle is the
Honda Civic The is a series of automobiles manufactured by Honda since 1972. Since 2000, the Civic has been categorized as a compact car, while previously it occupied the subcompact class. , the Civic is positioned between the Honda Fit/City and Honda Acc ...
GX, which runs on
compressed natural gas Compressed natural gas (CNG) is a fuel gas mainly composed of methane (CH4), compressed to less than 1% of the volume it occupies at standard atmospheric pressure. It is stored and distributed in hard containers at a pressure of , usually in cy ...
(CNG), a
fossil fuel A fossil fuel is a hydrocarbon-containing material formed naturally in the Earth's crust from the remains of dead plants and animals that is extracted and burned as a fuel. The main fossil fuels are coal, oil, and natural gas. Fossil fuels m ...
that burns cleaner than standard gasoline. Currently the standard credit for a qualified alternative fuel vehicle is $4,000. Other than the Civic GX, a number of models produced after 2004 may qualify for tax credits. * Electric vehicles: Government tax credit programs are planned for electric and plug-in hybrid vehicles, but no specific models have yet been certified.


Phase out credits

The 60,000-vehicle cap applies to all
nameplate A nameplate identifies and displays a person or product's name. Nameplates are usually shaped as rectangles but are also seen in other shapes, sometimes taking on the shape of someone's written name. Nameplates primarily serve an informat ...
s across an automaker's business, and as such,
Lexus is the luxury vehicle division of the Japanese automaker Toyota. The Lexus brand is marketed in more than 90 countries and territories worldwide and is Japan's largest-selling make of premium cars. It has ranked among the 10 largest Japanese ...
hybrids are accounted as part of
Toyota Motor Company is a Japanese multinational automotive manufacturer headquartered in Toyota City, Aichi, Japan. It was founded by Kiichiro Toyoda and incorporated on . Toyota is one of the largest automobile manufacturers in the world, producing about 10 ...
production, or
Mercury Mercury commonly refers to: * Mercury (planet), the nearest planet to the Sun * Mercury (element), a metallic chemical element with the symbol Hg * Mercury (mythology), a Roman god Mercury or The Mercury may also refer to: Companies * Merc ...
hybrids are part of
Ford Motor Company Ford Motor Company (commonly known as Ford) is an American multinational automobile manufacturer headquartered in Dearborn, Michigan, United States. It was founded by Henry Ford and incorporated on June 16, 1903. The company sells automobi ...
hybrid production. As of mid-2010 three auto manufactures have reached the 60,000 cap, Toyota reached it in 2007, Honda in 2008, and as of April 1, 2010, all Ford hybrid vehicles are also no longer eligible for tax credits. The new qualified plug-in electric vehicle credit phases out for a PEV manufacturer over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles from that manufacturer have been sold for use in the United States. For this purpose cumulative sales are accounted after December 31, 2009. Qualifying PEVs are eligible for 50% of the credit if acquired in the first two quarters of the phase-out period, and 25% of the credit if bought in the third or fourth quarter of the phase-out period. 79/sup> Both the
Nissan Leaf The , stylized as LEAF, is a Compact car, compact five-door hatchback battery electric vehicle, battery electric vehicle (BEV) manufactured by Nissan. It was introduced in Japan and the United States in December 2010, and its second generation w ...
electric vehicle and the
Chevrolet Volt The Chevrolet Volt is a plug-in hybrid manufactured by General Motors, also marketed in rebadged variants as the Holden Volt in Australia and New Zealand and the Buick Velite 5 in China, and with a different fascia as the Vauxhall Ampera in t ...
plug-in hybrid, launched in December 2010, are eligible for the maximum $7,500 tax credit. 82/sup> The
Toyota Prius Plug-in Hybrid The Toyota Prius Plug-in Hybrid (often abbreviated as the Prius and known as the Prius Prime in North America, South Korea, and New Zealand) is a plug-in hybrid liftback manufactured by Toyota. The first-generation model was produced from 2012 t ...
, released in January 2012, is eligible for a $2,500 tax credit due to its smaller battery capacity of 5.2 kWh. 83/sup> All
Tesla Motors Tesla, Inc. ( or ) is an American multinational automotive and clean energy company headquartered in Austin, Texas. Tesla designs and manufactures electric vehicles (electric cars and electric truck, trucks), battery energy storage from ...
cars are eligible for the 7,500 tax credit.


Currently available credits


Historical credit rankings

Hybrid tax credits from lowest to highest: * 2006-07
Chevrolet Silverado Hybrid The Chevrolet Silverado is a range of trucks manufactured by General Motors under the Chevrolet brand. Introduced for the 1999 model year, the Silverado is the successor to the long running Chevrolet C/K model line. Taking its name from th ...
2wd, $250 * 2006-07
GMC Sierra Hybrid The Chevrolet Silverado is a range of trucks manufactured by General Motors under the Chevrolet brand. Introduced for the 1999 model year, the Silverado is the successor to the long running Chevrolet C/K model line. Taking its name from the ...
2wd, $250 * 2008
Lexus LS 600h The Lexus LS (XF40) is the fourth generation of the Lexus LS line of full-size luxury sedans. Lexus debuted the model line at the 2006 North American International Auto Show, with variants including the standard wheelbase LS 460 (USF40) and l ...
, $450 (purchased on/before 9/31/07) / $0 (purchased on/after 10/1/07) * 2006-07
Chevrolet Silverado Hybrid The Chevrolet Silverado is a range of trucks manufactured by General Motors under the Chevrolet brand. Introduced for the 1999 model year, the Silverado is the successor to the long running Chevrolet C/K model line. Taking its name from th ...
4WD Four-wheel drive, also called 4×4 ("four by four") or 4WD, refers to a two-axled vehicle drivetrain capable of providing torque to all of its wheels simultaneously. It may be full-time or on-demand, and is typically linked via a transfer case ...
, $650 * 2006-07
GMC Sierra Hybrid The Chevrolet Silverado is a range of trucks manufactured by General Motors under the Chevrolet brand. Introduced for the 1999 model year, the Silverado is the successor to the long running Chevrolet C/K model line. Taking its name from the ...
4WD Four-wheel drive, also called 4×4 ("four by four") or 4WD, refers to a two-axled vehicle drivetrain capable of providing torque to all of its wheels simultaneously. It may be full-time or on-demand, and is typically linked via a transfer case ...
, $650 * 2005
Honda Accord Hybrid The , also known as the in Japan and China for certain generations, is a series of cars manufactured by Honda is a Japanese public multinational conglomerate manufacturer of automobiles, motorcycles, and power equipment, headquartered ...
, $650 (purchased on/before 12/31/07) / $325 (purchased 1/1/08-6/30/08) / $162.50 (purchased 7/1/08-12/31/08) / $0 (purchased on or after 1/1/09) * 2006
Honda Accord Hybrid The , also known as the in Japan and China for certain generations, is a series of cars manufactured by Honda is a Japanese public multinational conglomerate manufacturer of automobiles, motorcycles, and power equipment, headquartered ...
(w/o updated control calibration), $650 (purchased on/before 12/31/07) / $325 (purchased 1/1/08-6/30/08) / $162.50 (purchased 7/1/08-12/31/08) / $0 (purchased on or after 1/1/09) * 2007 Saturn VUE Green Line, $650 * 2010 Mercedes-Benz S400 Hybrid, $1,150 * 2007-08 Saturn Aura Green Line, $1,300 * 2008
Chevrolet Malibu Hybrid The Chevrolet Malibu is a mid-size car manufactured and marketed by Chevrolet from 1964 to 1983 and again since 1997. The Malibu began as a trim-level of the Chevrolet Chevelle, becoming its own model line in 1978. Originally a rear-wheel-drive ...
, $1,300 * 2006-07
Honda Accord Hybrid The , also known as the in Japan and China for certain generations, is a series of cars manufactured by Honda is a Japanese public multinational conglomerate manufacturer of automobiles, motorcycles, and power equipment, headquartered ...
(w/ updated control calibration), $1,300 * 2005-06
Honda Insight The is a hybrid electric vehicle that is manufactured and marketed by Honda. Its first generation was a two-door, two passenger liftback (1999–2006) and in its second generation was a four-door, five passenger liftback (2009–2014). In its ...
CVT, $1,450 (purchased on/before 12/31/07) / $725 (purchased 1/1/08-6/30/08) / $362.50 (purchased 7/1/08-12/31/08) / $0 (purchased on or after 1/1/09) * 2007
Lexus GS 450h The is an executive car sold by Lexus, the premium division of Toyota. The same car had been launched in 1991 as the Toyota Aristo in Japan. For non-Japanese markets, it was released as the Lexus GS in February 1993. It continued using the Toyot ...
, $1,550 (purchased on/before 30 September 2006) / $775 (purchased 10/01/06-03/31/07) / $387.50 (purchased 04/01/07-09/30/07) / $0 (purchased on or after 10/01/07) * 2009-10
Chevrolet Malibu Hybrid The Chevrolet Malibu is a mid-size car manufactured and marketed by Chevrolet from 1964 to 1983 and again since 1997. The Malibu began as a trim-level of the Chevrolet Chevelle, becoming its own model line in 1978. Originally a rear-wheel-drive ...
, $1,550 * 2009
Saturn Aura Hybrid The Saturn Aura is a four-door, five-passenger front engine/front-wheel drive mid-sized sedan manufactured and marketed by GM's Saturn subsidiary over a single generation from 2006–2009. The car launched one year before the seventh generatio ...
, $1,550 * 2008-09
Saturn Vue The Saturn Vue is a compact SUV that was sold and built by Saturn, and it was Saturn's best-selling model. It was the first vehicle to use the GM Theta platform when it was introduced in 2001 for the 2002 model year. The Vue was later facelifted ...
Hybrid, $1,550 * 2005
Honda Civic Hybrid The is a series of automobiles manufactured by Honda since 1972. Since 2000, the Civic has been categorized as a compact car, while previously it occupied the subcompact class. , the Civic is positioned between the Honda Fit/City and Honda Acc ...
(
SULEV Super ultra-low emissions vehicle (SULEV) is a U.S. classification for passenger vehicle emissions. The classification is based on producing 90% fewer emissions than the average gasoline-powered vehicle. The SULEV standard is stricter than the stan ...
) MT & CVT, $1,700 (purchased on/before 12/31/07) / $850 (purchased 1/1/08-6/30/08) / $425 (purchased 7/1/08-12/31/08) / $0 (purchased on or after 1/1/09) * 2009
Cadillac Escalade Hybrid The Cadillac Escalade is a full-size luxury SUV engineered and manufactured by General Motors. It was Cadillac's first major entry into the SUV market. The Escalade was introduced for the 1999 model year in response to competition from the Merc ...
4WD, $1,800 * 2005-07, 09
Ford Escape Hybrid The Ford Escape is a compact crossover SUV sold by Ford since 2000 over four generations. The first generation was jointly developed with Mazda which also created the Mazda Tribute and Mercury Mariner as the twin model. Second generations of t ...
4WD Four-wheel drive, also called 4×4 ("four by four") or 4WD, refers to a two-axled vehicle drivetrain capable of providing torque to all of its wheels simultaneously. It may be full-time or on-demand, and is typically linked via a transfer case ...
, $1,950 (purchased on/before 31 March 2009) / $975 (purchased 04/01/09-09/30/09) / $487.50 (purchased 10/01/09-03/31/10) / $0 (purchased on/after 04/01/10) * 2006-07, 09
Mercury Mariner Hybrid The Ford Escape is a compact crossover SUV sold by Ford since 2000 over four generations. The first generation was jointly developed with Mazda which also created the Mazda Tribute and Mercury Mariner as the twin model. Second generations of th ...
4WD Four-wheel drive, also called 4×4 ("four by four") or 4WD, refers to a two-axled vehicle drivetrain capable of providing torque to all of its wheels simultaneously. It may be full-time or on-demand, and is typically linked via a transfer case ...
, $1,950 (purchased on/before 31 March 2009) / $975 (purchased 04/01/09-09/30/09) / $487.50 (purchased 10/01/09-03/31/10) / $0 (purchased on/after 04/01/10) * 2009
Mazda Tribute The (''Code J14'') is a compact SUV made by Japanese automaker Mazda from 2000 to 2011. It was jointly developed with Ford Motor Company and based on the front-wheel drive Mazda 626 platform, which was in turn the basis for the similar Ford Esc ...
Hybrid
4WD Four-wheel drive, also called 4×4 ("four by four") or 4WD, refers to a two-axled vehicle drivetrain capable of providing torque to all of its wheels simultaneously. It may be full-time or on-demand, and is typically linked via a transfer case ...
, $1,950 * 2006-08
Honda Civic Hybrid The is a series of automobiles manufactured by Honda since 1972. Since 2000, the Civic has been categorized as a compact car, while previously it occupied the subcompact class. , the Civic is positioned between the Honda Fit/City and Honda Acc ...
CVT, $2,100 (purchased on/before 12/31/07) / $1,050 (purchased 1/1/08-6/30/08) / $525 (purchased 7/1/08-12/31/08) / $0 (purchased on or after 1/1/09) * 2006-08
Lexus RX 400h The is a luxury crossover SUV sold since 1998 by Lexus, a luxury division of Toyota. Originally released in its home market of Japan in late 1997 as the Toyota Harrier, export sales began in March 1998 as the Lexus RX. Considered as the first ...
2WD or
4WD Four-wheel drive, also called 4×4 ("four by four") or 4WD, refers to a two-axled vehicle drivetrain capable of providing torque to all of its wheels simultaneously. It may be full-time or on-demand, and is typically linked via a transfer case ...
, $2,200 (purchased on/before 30 September 2006) / $1100 (purchased 10/01/06-03/31/07) / $550(purchased 04/01/07-09/30/07) / $0 (purchased on or after 10/01/07) * 2008
Ford Escape Hybrid The Ford Escape is a compact crossover SUV sold by Ford since 2000 over four generations. The first generation was jointly developed with Mazda which also created the Mazda Tribute and Mercury Mariner as the twin model. Second generations of t ...
4WD Four-wheel drive, also called 4×4 ("four by four") or 4WD, refers to a two-axled vehicle drivetrain capable of providing torque to all of its wheels simultaneously. It may be full-time or on-demand, and is typically linked via a transfer case ...
, $2,200 (purchased on/before 31 March 2009) / $1,100 (purchased 04/01/09-09/30/09) / $550 (purchased 10/01/09-03/31/10) / $0 (purchased on/after 04/01/10) * 2008
Mercury Mariner Hybrid The Ford Escape is a compact crossover SUV sold by Ford since 2000 over four generations. The first generation was jointly developed with Mazda which also created the Mazda Tribute and Mercury Mariner as the twin model. Second generations of th ...
4WD Four-wheel drive, also called 4×4 ("four by four") or 4WD, refers to a two-axled vehicle drivetrain capable of providing torque to all of its wheels simultaneously. It may be full-time or on-demand, and is typically linked via a transfer case ...
, $2,200 (purchased on/before 31 March 2009) / $1,100 (purchased 04/01/09-09/30/09) / $550 (purchased 10/01/09-03/31/10) / $0 (purchased on/after 04/01/10) * 2009-10
Cadillac Escalade Hybrid The Cadillac Escalade is a full-size luxury SUV engineered and manufactured by General Motors. It was Cadillac's first major entry into the SUV market. The Escalade was introduced for the 1999 model year in response to competition from the Merc ...
2WD, $2,200 * 2010
Cadillac Escalade Hybrid The Cadillac Escalade is a full-size luxury SUV engineered and manufactured by General Motors. It was Cadillac's first major entry into the SUV market. The Escalade was introduced for the 1999 model year in response to competition from the Merc ...
4WD, $2,200 * 2009-10
Chevrolet Silverado The Chevrolet Silverado is a range of trucks manufactured by General Motors under the Chevrolet brand. Introduced for the 1999 model year, the Silverado is the successor to the long running Chevrolet C/K model line. Taking its name from th ...
Hybrid, $2,200 * 2008-10
Chevrolet Tahoe The Chevrolet Tahoe, and its badge engineered GMC Yukon counterpart, are full-size SUVs from General Motors, offered since 1994 and 1991, respectively. Since 1982, Chevrolet and GMC sold two different-sized SUVs under their 'Blazer' and 'Jimmy ...
Hybrid, $2,200 * 2009
Chrysler Aspen The Dodge Durango is a mid-size sport utility vehicle (SUV) produced by Dodge in three generations starting with the 1998 model year. The first two generations were very similar in that both were based on the Dodge Dakota and Ram Pickup, both fe ...
Hybrid, $2,200 * 2009
Dodge Durango The Dodge Durango is a mid-size sport utility vehicle (SUV) produced by Dodge in three generations starting with the 1998 model year. The first two generations were very similar in that both were based on the Dodge Dakota and Ram Pickup, both fe ...
Hybrid, $2,200 * 2009-10
GMC Sierra GMC Sierra (Classic) may refer to GMC counterparts, either as model names or as trim lines, to the following Chevrolet vehicles: *Chevrolet C/K *Chevrolet Silverado *Chevrolet Suburban The Chevrolet Suburban is a series of automobiles bui ...
Hybrid, $2,200 * 2008-10
GMC Yukon GMC may refer to: Government India * Gandhinagar Municipal Corporation, in Gujarat * Gobichettipalayam Municipal Corporation, in Tamil Nadu * Guntur Municipal Corporation, in Andhra Pradesh * Guwahati Municipal Corporation, in Assam * Gwalior ...
Hybrid, $2,200 * 2007-10
Nissan Altima Hybrid The Nissan Altima is a mid-size car that has been manufactured by Nissan since 1992. It is a continuation of the Nissan Bluebird line, which began in 1955. The Altima has historically been larger, more powerful, and more luxurious than the Nissa ...
, $2,350 * 2007
Toyota Camry Hybrid The Toyota Camry (XV50) is a mid-size car produced by Toyota from August 2011 to March 2019. Replacing the XV40 series, the XV50 represents the seventh generation of the Toyota Camry in all markets outside Japan, which follows a different genera ...
, $2,600 (purchased on/before 30 September 2006) / $1300 (purchased 10/01/06-03/31/07) / $650(purchased 04/01/07-09/30/07) / $0 (purchased on or after 10/01/07)IRS Tax Credit Information
IRS. Retrieved 29 July 2006.

USA Today, Update as of July 21, 2006
* 2006-08
Toyota Highlander Hybrid The Toyota Highlander, also known as the , is a mid-size crossover SUV with three-row seating produced by Toyota since 2000. Announced in April 2000 at the New York International Auto Show and arriving in late 2000 in Japan and January 2001 in ...
2WD or
4WD Four-wheel drive, also called 4×4 ("four by four") or 4WD, refers to a two-axled vehicle drivetrain capable of providing torque to all of its wheels simultaneously. It may be full-time or on-demand, and is typically linked via a transfer case ...
, $2,600 (purchased on/before 30 September 2006) / $1300 (purchased 10/01/06-03/31/07) / $650(purchased 04/01/07-09/30/07) / $0 (purchased on or after 10/01/07) * 2005-07
Ford Escape Hybrid The Ford Escape is a compact crossover SUV sold by Ford since 2000 over four generations. The first generation was jointly developed with Mazda which also created the Mazda Tribute and Mercury Mariner as the twin model. Second generations of t ...
2WD, $2,600 (purchased on/before 31 March 2009) / $1,300 (purchased 04/01/09-09/30/09) / $650 (purchased 10/01/09-03/31/10) / $0 (purchased on/after 04/01/10) * 2008-09
Ford Escape Hybrid The Ford Escape is a compact crossover SUV sold by Ford since 2000 over four generations. The first generation was jointly developed with Mazda which also created the Mazda Tribute and Mercury Mariner as the twin model. Second generations of t ...
2WD, $3,000 (purchased on/before 31 March 2009) / $1,500 (purchased 04/01/09-09/30/09) / $750 (purchased 10/01/09-03/31/10) / $0 (purchased on/after 04/01/10) * 2008-09
Mercury Mariner Hybrid The Ford Escape is a compact crossover SUV sold by Ford since 2000 over four generations. The first generation was jointly developed with Mazda which also created the Mazda Tribute and Mercury Mariner as the twin model. Second generations of th ...
2WD, $3,000 (purchased on/before 31 March 2009) / $1,500 (purchased 04/01/09-09/30/09) / $750 (purchased 10/01/09-03/31/10) / $0 (purchased on/after 04/01/10) * 2008-09
Mazda Tribute The (''Code J14'') is a compact SUV made by Japanese automaker Mazda from 2000 to 2011. It was jointly developed with Ford Motor Company and based on the front-wheel drive Mazda 626 platform, which was in turn the basis for the similar Ford Esc ...
Hybrid 2WD, $3,000 * 2005-08
Toyota Prius The is a car built by Toyota which has a Hybrid vehicle drivetrain, hybrid drivetrain, combining an internal combustion engine with an electric motor. Initially offered as a four-door Sedan (automobile), sedan, it has been produced only as ...
$3,150 (purchased on/before 30 September 2006) / $1575 (purchased 10/01/06-03/31/07) / $787.50 (purchased 04/01/07-09/30/07) / $0 (purchased on or after 10/01/07) * 2010
Ford Fusion Hybrid The Ford Fusion Hybrid is a hybrid electric vehicle, gasoline-electric hybrid powered version of the mid-size car, mid-sized Ford Fusion (Americas), Ford Fusion sedan (automobile), sedan manufactured and marketed by Ford Motor Company, Ford, now i ...
, $3,400 (purchased on/before 31 March 2009) / $1,700 (purchased 04/01/09-09/30/09) / $850 (purchased 10/01/09-03/31/10) / $0 (purchased on/after 04/01/10) * 2010
Mercury Milan Hybrid The Ford Fusion Hybrid is a gasoline-electric hybrid powered version of the mid-sized Ford Fusion sedan manufactured and marketed by Ford, now in its second generation. A plug-in hybrid version, the Ford Fusion Energi, was released in the U.S. ...
, $3,400 (purchased on/before 31 March 2009) / $1,700 (purchased 04/01/09-09/30/09) / $850 (purchased 10/01/09-03/31/10) / $0 (purchased on/after 04/01/10)


State Incentives

The main federal incentive for consumers to purchase fuel efficient vehicles is to give tax credits. States also have their own incentive programs to further incentivize fuel efficient vehicles in their own states. These incentives range from more tax credits, to discounts on insurance, to price reductions on car registration fee's. Some states offer free parking for electric vehicles, or rebates to people who install charging stations at their home or business. Almost every state has a different approach to get more people to reduce their cars carbon footprint. The states incentivize programs to get people to purchase efficient vehicles, because it reduces negative externalities such as air pollution, and increases the likelihood of lower income families to have the opportunity to purchase clean air vehicles. *Arizona- taxpayers can receive a $75 tax credit to install an EV charging outlet at their own home. Some hybrids may qualify for reduced license fees. Arizona has allowed 10,000 EV and plug in hybrids to gain access to the HOV lanes, but this incentive has reached its capacity. *California- The state government offers rebates through the Clean Vehicle Rebate Project (CVRP) where taxpayers who purchase an EV or plug in hybrid can receive $2,500 dollars. Restrictions on eligibility have been placed due to limited funding and high demand. California allows for an unlimited amount of EV's and Plug in Hybrids to access the states HOV lanes. A majority of Californias utility plants offer discounted rates for charging the cars on off peek hours. *Colorado- The state government has incentivized consumers on purchasing EV's giving out $5,000 grants that are available instantaneously after the purchase. *Connecticut- up to $3,000 can be regained via rebate with Connecticut Hydrogen and Electric Automobile Purchase Rebate (CHEAPR) program. *Delaware- The state government offers a $2,200 rebate to lease or buy an EV. They also have a $1,100 rebate to convert a combustion engine into a pure electric vehicle.


Carpool lane incentives

As of July 29, 2005
Arizona Arizona ( ; nv, Hoozdo Hahoodzo ; ood, Alĭ ṣonak ) is a state in the Southwestern United States. It is the 6th largest and the 14th most populous of the 50 states. Its capital and largest city is Phoenix. Arizona is part of the Fou ...
Revised Statutes from the 47th session Chapters 28-2416 and 28-737 allow hybrid vehicles that have been approved by the
EPA The Environmental Protection Agency (EPA) is an independent executive agency of the United States federal government tasked with environmental protection matters. President Richard Nixon proposed the establishment of EPA on July 9, 1970; it be ...
as meeting, at a minimum, the United States Environmental Protection Agency Ultralow Emission Vehicle Standard with a special plates/hybrid sticker displayed on said vehicle to use the High Occupancy Vehicle (HOV) lanes regardless of the number of passengers. Arizona has not instituted this policy, as it is awaiting clarification of the federal Hybrid HOV waiver from the EPA. On January 16, 2006, SB 1179 was introduced that would reaffirm the HOV benefit, pending federal clearance. In
California California is a U.S. state, state in the Western United States, located along the West Coast of the United States, Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the List of states and territori ...
, hybrids with an EPA estimate of or higher meet the requirements to drive in California's carpool lanes with only one passenger.
Virginia Virginia, officially the Commonwealth of Virginia, is a state in the Mid-Atlantic and Southeastern regions of the United States, between the Atlantic Coast and the Appalachian Mountains. The geography and climate of the Commonwealth ar ...
has also provisions for hybrid vehicles. For example, the
Toyota Camry Hybrid The Toyota Camry (XV50) is a mid-size car produced by Toyota from August 2011 to March 2019. Replacing the XV40 series, the XV50 represents the seventh generation of the Toyota Camry in all markets outside Japan, which follows a different genera ...
was eligible, but must have been specially tagged by June 30, 2006 to be eligible for
I-95 Interstate 95 (I-95) is the main north–south Interstate Highway on the East Coast of the United States, running from US Route 1 (US 1) in Miami, Florida, to the Houlton–Woodstock Border Crossing between Maine and the Canadia ...
and
I-395 Interstate 395 may refer to: *Interstate 395 (Connecticut–Massachusetts), a spur from I-95 to Auburn, Massachusetts *Interstate 395 (Delaware), a proposed portion of I-95 in Delaware, when it was under construction *Interstate 395 (Florida), a spu ...
exemption. Exemption for
I-66 Interstate 66 (I-66) is an east–west Interstate Highway in the eastern United States. It runs from an interchange with I-81 near Middletown, Virginia, on its western end to an interchange with U.S. Route 29 (US 29) in Washingt ...
and
Dulles Toll Road State Route 267 (SR 267) is a primary state highway in the US state of Virginia. It consists of two end-to-end toll roads – the Dulles Toll Road and Dulles Greenway – as well as the non-tolled Dulles Access Road, which lies in the ...
HOV usage continues even for registrations beyond June 30.


See also

*
Energy Improvement and Extension Act of 2008 Public Law 110-343 () is a US Act of Congress signed into law by U.S. President George W. Bush, which was designed to mitigate the growing financial crisis of the late-2000s by giving relief to so-called "Troubled Assets." Three divisions ...
*
Government incentives for plug-in electric vehicles Government incentives for plug-in electric vehicles have been established around the world to support policy-driven adoption of plug-in electric vehicles. These incentives mainly take the form of purchase rebates, tax exemptions and tax credits, ...


Notes

{{DEFAULTSORT:Government Incentives For Fuel Efficient Vehicles In The United States
Tax credit A tax credit is a tax incentive which allows certain taxpayers to subtract the amount of the credit they have accrued from the total they owe the state. It may also be a credit granted in recognition of taxes already paid or a form of state "disc ...
Taxation in the United States Tax credits