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On August 8, 2005 President Bush signed the Energy Policy Act of 2005, which omitted provisions that would have provided tax incentives for manufacturers of advanced vehicle technologies.
One of the provisions that failed to receive support was the Bingaman Global Warming Amendment, which established emission reduction targets that gradually slow the growth of global warming emissions. It would have used revenues generated from carbon permits to provide tax incentives for the domestic production of advanced technology vehicles, such as hybrids and diesel vehicles. The UAW was a large supporter of the amendment, believing that providing incentives to manufacturers of advanced vehicles and technologies is important for the preservation of US manufacturing jobs.
The final version of the energy bill included only consumer incentives for the purchase of hybrids and other advanced technology vehicles. According to an analysis done by the American Council for an Energy Efficient Economy (ACEEE), consumers who purchase an Escape Hybrid or Mariner Hybrid are eligible for up to $2600 in tax credit (depending on vehicle options), purchasers of the GMC Sierra or Chevrolet Silverado mild hybrids are eligible for up to $650. ACEEE also estimated that the GMC Yukon and Chevrolet Tahoe SUV hybrids will each provide up to $1800 in credit when they are launched next year. A full list of vehicle tax credits is available on the ACEEE website.
Providing consumer incentives without complementary manufacturer incentives could encourage companies to import more hybrids and hybrid components from overseas, rather than entice companies to manufacture them in the US. According to a study by the University of Michigan Office for Study of Automotive Transport, without manufacturing tax credits a majority of hybrid and advanced diesel vehicles will likely be imported, resulting in up to 200,000 lost jobs and $2.8 billion per year in lost federal tax revenues (download study) .