WASHINGTON, D.C. — Cars and trucks with new, cleaner-burning diesel engines and gasoline-electric hybrids would be eligible for tax credits under a $2.5 billion initiative President Bush outlined April 27, according to the Detroit News. Making a renewed push to encourage development of new fuels, Bush said he supported wider use of ethanol and biodiesel — diesel fuel extracted from leftover fats and vegetable oils. He also praised emerging hybrid technology as a crucial step toward the fuel-cell cars of the future. "Their electronic systems are paving the way for tomorrow's hydrogen-powered vehicles," Bush said. The cost of driving has soared as the price of oil reached a record $55 a barrel and gasoline prices topped $2.20 a gallon. Tax credits could provide a huge boost for diesel engines, which many in the United States continue to view as noisy and dirty despite major advances. Diesel-powered cars represent nearly half of all sales in Europe but less than 1 percent in the United States, where many consumers remember the shoddy diesels of the 1970s. At the same time, sales of gasoline-electric hybrid vehicles such as the Toyota Prius, Ford Escape Hybrid, and Honda Civic Hybrid are soaring, with buyers forced to wait months to purchase one. In the last year, Jeep, Volkswagen AG, and Mercedes-Benz have introduced a new generation of diesel-powered vehicles.

Originally posted on Fleet Financials