Second generation Toyota Prius

Chevrolet Volt
Toyota balks at a proposed tax credit for the Chevrolet Volt

When it comes to hybrid vehicles, Toyota's Prius is the king of the road. The vehicle was first introduced in 2000 as a 2001 model and the second generation model bowed in 2003 as a 2004 model. The Prius has given Toyota enormous mindshare when it comes to perception and has given the company plenty of experience developing hybrid powertrains.

When the second generation Prius reached the marketplace, it received tax credits from the American government due to its hybrid powertrain. For buyers who purchased a Prius from January 1, 2006 through September 30, 2006, the tax credit was a generous $3,150; from October 1, 2006 through March 31, 2007, the tax credit was $1,575; and from April 1, 2007 through September 30, 2007, the tax credit was $787. Purchases made after October 1, 2007 were ineligible for a tax credit.

Now that General Motors' Chevrolet Volt is roughly two years away from American showrooms, the Senate Energy and National Resources committee is cooking up a new round of tax credits that would be beneficial to the Volt (and others of its ilk). The committee has plans to offer a $3,000 tax credit for light-duty plug-in electric vehicles that feature a 6 kWh or larger battery for propulsion.

The Chevrolet Volt, which has a 16 kWh battery pack composed of 220 lithium-ion cells, would qualify for a $7,500 tax credit.

Toyota, which has seen tax credits of at least $3,150 on its Prius in the past, is opposed to the 6 kWh minimum requirement according to Motor Trend. Toyota's Robert Wimmer said that the legislation "redefines plug-in electric vehicles to seemingly eliminate consumer tax credits for all but one plug-in vehicle design."

Toyota feels that the 6 kWh requirement puts GM at an advantage and that such a technological feat is out of reach for other auto manufacturers -- including Toyota.

"We believe consumer incentives should encourage all plug-in designs and allow the consumer market to select winners, not legislation," added Wimmer who is Toyota Motor North America's National Manager of Energy and Environmental Research.

"Toyota believes this approach is counterproductive," Wimmer continued. "It will discourage manufacturers from developing and consumers from purchasing 'blended' plug-ins that are affordable to the greatest number of consumers."

Toyota's Prius features a NiMH battery pack with just 1.3 kWh of energy. Toyota's third generation Prius, which is due to be unveiled at the Detroit Auto Show in January, will also stick to a NiMH design and likely will not improve significantly on that figure. It's also quite plausible that a planned lithium-ion upgrade for the third generation Prius halfway through its life cycle will not come close to reaching the 6 kWh minimum requirement for the $3,000 plug-in hybrid credit.

The 16 kWh battery pack in the Chevrolet Volt gives the vehicle an all-electric range of 40 miles. Even when equipped with prototype plug-in technology, Toyota’s Prius can only manage 10 miles of range on battery power alone.

"Although we hope some day to sell plug-in hybrids to retail customers, the only thing we have announced is that we will place several hundred plug-in Prius vehicles in commercial fleets by the end of next year," said Toyota spokesman Irv Miller. "As much as we want to speed the latest hybrid technology to the public, we have vowed as a company to not release new systems until they are reliable and ready for everyday use."

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