There are four categories of vehicles that qualify for the Alternative Fuel Credit, also known as the Alternative Motor Vehicle or Alternative Fuel Motor Vehicle Credit:
-- Qualified hybrid vehicles
-- Qualified fuel-cell vehicles
-- Qualified alternative-fuel motor vehicles (QAFMVs) and heavy hybrids
-- Advanced lean-burn-technology vehicles.
Hybrid vehicles have drive trains that are powered by both an internal combustion engine and a rechargeable battery. You can find a list of qualified hybrid vehicles and their credit amounts at this IRS Web site.
A fuel-cell vehicle derives its power from one or more cells that convert chemical energy directly into electricity. You can find a listing of qualified fuel-cell vehicles at this IRS Web site.
QAFMVs can be either new vehicles or previously used vehicles that have been converted to alternative-fuel use by an aftermarket installer. Qualified alternative fuels include:
-- Compressed natural gas
-- Liquefied natural gas
-- Liquefied petroleum gas (propane)
-- Hydrogen
-- Any liquid whose volume consists of at least 85% methanol
-- Certain mixed fuels such as gasoline and liquefied propane or natural gas.
Qualifying heavy hybrids must be new vehicles of more than 8,500 pounds that are powered by both an internal combustion or heat engine using consumable fuel and a rechargeable energy storage system. A list of QAFMVs and qualified heavy hybrids is available at this IRS Web site.
Advanced lean-burn-technology vehicles are passenger cars or light trucks with internal combustion engines that primarily operate using more air than is necessary for the complete combustion of the fuel. They must include direct-fuel-injection technology and have a city-fuel-economy rating that is at least 125% of the 2002 model-year rating. They generally use diesel fuel. A list of advanced lean-burn-technology vehicles that qualify for the tax credit is available at this IRS Web site.
You can learn more about vehicles that qualify for the alternative fuel credit from the IRS.
