Toyota Reaches Credit Limit

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Japan's Toyota has become the first manufacturer to reach the production limit for tax credit on hybrid vehicles in the US. The federal law states that tax credits for hybrid vehicles are only available until a manufacturer produces 60,000 units. The full credit is valid for the next quarter after the limit is reached and then reduced by half for the next six months. A final reduction takes the credit to 25% of the original amount for a further six months and then the benefit is removed altogether.