Rebates, income tax credits, and increasing model availability are a few approaches used to increase the demand for hybrid cars. Toyota has asked for an extension and a boost on the 60,000 sales limit cap for each automaker for the income tax credit when buying a hybrid car. According to an article in USA Today, as the income tax credit for buying a hybrid has decreased, so has the demand for the Toyota Prius and other Toyota hybrid cars. With lowered demand a decrease in economies of scale for Toyota hybrids has become prevalent. Toyota is the only automaker giving this strong plea for an extension and a raised cap for the tax credit. Toyota was also the only car maker who reached the sales limit which was set by congress.
The government has subsidized the hybrid car industry to increase the demand of a product that they saw as beneficial to the environment in more ways then one. Is this going to be the only reason that the subsidy will continue or is there going to be another strong armed reason?