A First for the First | Green Energy News

August 11, 2002 – Vol.7 No.20

A FIRST FOR THE FIRST.

Toyota’s Prius (which means first) was the first hybrid electric mass-produced passenger car sold in the world. Now it is the first hybrid-electric-gasoline vehicle to be certified by the United States Internal Revenue Service to be eligible for a full $2000 clean burning fuel tax deduction.

In the letter to Toyota, the IRS made clear that electricity was used to propel the vehicle. (Electricity is considered a clean fuel by the IRS.) Prius model years 2001, 2002 and 2003 are eligible for the deduction.

The Prius is slightly more electric than its nearest U.S. competitor Honda’s Civic Hybrid. The Prius will drive (up to about 10 miles per hour) under electric power alone - making it an electrically driven car. The Civic on the other hand has an electric motor to assist the gasoline drive motor - to give it more power when needed. The Civic cannot move under electric power alone. It needs gasoline.

Certainly we will soon see how the IRS handles this small distinction. For cars similar in size and function, the $2000 clean fuel deduction may sway buyers towards a Prius over the Civic Hybrid.

Ask your Toyota dealer and tax advisor about the tax deduction. Visit Toyota Media at http://pressroom.toyota.com/.