Toyota Motor Corp. is inching closer to using up a key U.S. tax credit for hybrid and electric vehicles, a milestone the automaker argues will raise its costs and hinder adoption of climate-friendly cars.
Current law allows automakers to offer a $7,500 (¥980,000) tax credit to buyers of fully or partly electric cars, but only up to 200,000 per company. Demand for Toyota’s plug-in hybrid vehicles has steadily grown, especially as gasoline prices have surged past $4 a gallon, pushing up its cumulative sales of eligible vehicles to 183,000 as of the end of 2021, according to an analysis by BloombergNEF. The company reported sales of another 8,421 plug-in hybrid and electric cars in the first quarter.
The Japanese manufacturer, which has been at the center of a debate in Washington over whether extra tax credits should be extended to unionized carmakers, is poised to become the third manufacturer to hit the limit, joining General Motors Co. and Tesla Inc. Toyota executives have said they are planning for their share of credits to run out as soon as this summer.