Hybrid Car Review

Senator McCain laid out his plan for the auto industry in a speech in California. He wants

• More ethanol (flex-fuel) vehicles.
• Zero emission cars will get a $5,000 tax credit.
• Other cars will get tax credits based on the carbon emissions.
• Higher levies on automakers that don't comply with CAFE Standards.
• $300 million prize to anyone who can develop a car battery that can 'leapfrog the commercially available plug-in hybrids or electric cars.' It should deliver power at 30 percent of the current costs.

That last sounds similar to, but not quite like, the X-Prize. Normal procedures for the federal government is to offer grants to companies and individuals to research new technology or science, not offer up a prize.

A $5,000 tax credit for zero emissions vehicles would be welcomed by many. But, as McCain himself points out, by the time the federal tax credit came to be for hybrids, there were a "hodgepodge of incentives" for the purchase of fuel-efficient cars. So too would McCains' proposal come to be.

If it came to that, the government could extend the federal tax credit for hybrids already in place. They would have to make room for the companies that have already overrun their limits (Toyota and Honda), but it could be done.