Popular hybrids sold in the U.S. either no longer qualify for tax breaks or are about to see them cut very sharply. Starting tomorrow, the Honda Civic Hybrid will see a cut in tax credit from $1,050 to $525. Toyota Prius and the Camry Hybrid saw their $3,150 tax credits disappear last fall. The Prius and Civic rank first and second in terms of fuel-economy followed by the Camry Hybrid at no.3.
Why would the government make such a move when gas-prices are at an all time high? Well, according to the 2005 federal law that started the hybrid tax credits, the tax break begins to phase out after an automaker sells 60,000 qualifying vehicles.
For those of you who were unaware, Toyota felt this back in October of 2007, when there was a heavy demand for the Prius.
Honda hit the limit last year and the original tax break of $2,100 was cut to $1,050. It will be cut to $525 tomorrow.