Ford touts $3,400 tax credit for new hybrids

Fusion and Mercury Milan qualify for large amount due to high mileage

	Ford presents its Fusion hybrid car at the Los Angeles Auto Show on Nov. 18.
David McNew / Getty Images

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updated 4:07 p.m. ET Jan. 29, 2009

DETROIT - Consumers who order or purchase a new 2010 hybrid vehicle from Ford Motor Co. by the end of March are eligible for a tax credit, the company said Wednesday.

Purchases or orders of new Ford Fusion and Mercury Milan hybrids made by March 31 will qualify for a $3,400 credit on their 2009 tax returns.

The company unveiled its hybrid version of the Ford Fusion last November that can go up to 47 miles per hour on battery power alone. The Fusion gets 41 miles per gallon in the city and 36 mpg on the highway.

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The Ford Escape and Mercury Mariner hybrids are still eligible for a $3,000 tax credit. The credits vary due to the performance of the vehicle. The Escape and Mariner get 34 mpg in the city, and 31 mpg on highways.

Ford said its Fusion hybrid would be in showrooms by March 31, but did not offer pricing details. Consumers have shied away from the electric-gas combo cars as gas prices have fallen rapidly since last summer, as the cost savings deteriorated.

According to the auto Web site Edmunds.com, hybrid sales plunged 43 percent in December and 50 percent in November, surpassing the industry's overall sales decline of 36 percent in December and 37 percent the month before.

Fusion and Milan hybrids purchased between April 1 and Sept. 31 are eligible for a $1,700 credit. The tax credit drops to $850 for purchases between Oct. 1 and March 31, 2010. The credit drops over time because Ford has more than 60,000 hybrid vehicles on the road, and tax regulations state that the credit must be phased out after that threshold is met.

"The whole idea is to encourage early adopters," said Ford spokeswoman Jennifer Moore.

New Ford hybrids purchased on or after April 1, 2010 will not be eligible for a tax credit.