The 2008 Nissan Altima Hybrid has been officially approved by the IRS as a qualified hybrid vehicle for the Alternative Motor Vehicle Credit. Buyers of the car may now be eligible for a tax credit up to $2,350, the same amount offered for the 2007 model of the car. The renewal of the Altima tax credit gives Nissan’s hybrid an advantage over its closest competitor, the Toyota Camry Hybrid. Toyota hybrids are no longer eligible for any tax credit.
The IRS reported that Nissan sold a total of 7,849 qualifying hybrid vehicles as of the quarter ending September 30, 2007. According to tax credit guidelines, an automaker can offer the incentive on its vehicles until it sells 60,000 qualified hybrids. Once sales hit this magic number, the credits begin to phase out. Nissan has quite a long way to go before hitting the ceiling—especially since the Altima Hybrid is currently available in just eight states.
The Altima Hybrid’s retail price is competitive at $24,400—about $1,500 less than the Camry. When you add another $2,350 offered to Altima buyers in the form of the federal hybrid tax credit, then the difference in price between the two vehicles approaches four grand.
Toyota and Honda have each already sold their 60,000 hybrids. The reduction of tax credits for Toyota hybrids, which were the first to expire, have apparently had little effect on sales of the company’s hybrid vehicles.
It remains to be seen if Nissan’s cost advantage—as a result of the tax credit—creates more interest in the Altima Hybrid in the eight states where the vehicle is sold.