Dave McCurdy: Congress could extend Cash-For-Clunkers, add more funding
The final Cash-for-Clunkers bill that President Obama signed into law back on June 24th carried a total of $1 billion in funding, which is a quarter of the amount the legislation initially called for. Dave McCurdy, president of the Alliance of Automobile Manufacturers, tells Automotive News that's only enough to cover roughly 250,000 vehicles and – assuming the program is successful – that Congress may vote in the fall to add more funding:
I think it'll go very quickly, and Congress may have to revisit it in the fall... 250,000 vehicles isn't enough. We think there'll be additional phases of this. It'll probably evolve.McCurdy goes on to suggest that the controversial bill's evolution may well include a more stringent set of fuel efficiency requirements. Currently, the full $4,500 incentive is available on any vehicle that at least 10 mpg more efficient that the sub-18 mpg vehicle it replaces. A smaller $3,500 payout goes to anyone that trashes a car for one that manages at least 4 mpg better than the vehicle it replaces or a new pickup that's at least 2 mpg more efficient than the so-called clunker.
[Source: Automotive News - sub. req'd | Image: Theo Heimann/Getty]
Reader Comments (Page 1 of 1)
contact 9:22AM (7/08/2009)
This would be much more effective if the bill accepted ANY vehicle that got a 10mpg improvement regardless of starting mpg.
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Earl Killian 10:56AM (7/08/2009)
MPG is the wrong metric. Greenhouse pollution is proportional to gallons per mile (or gallons per 1000 miles), so you want the incentive to decrease GPM. You would also like to include the greenhouse pollution from manufacturing a new car early. Or even better just do the whole calculation in tonnes of CO2e.
If we assume a 150,000-mile vehicle lifetime (12 years at 12,500 miles/year, or 10 years at 15,000 miles/year), the net emissions effect of the trade-up is
(150,000 − OldMiles) × (NewCO2permile − OldCO2permile) + NewProductionCO2
If this is negative, we reduce emissions. Our voucher should be a number of dollars times the emissions reduction.
For example, if the government is willing to pay $30/tonne, then trading in a 2003 Camry automatic 5-spd (526 g CO2e/mi, wells-to-wheels) with 87,5000 miles on it for a new 2009 Prius (242 g CO2e/mi), and you get something like −12.7 tonnes, which is worth a $381 voucher.
As another example, consider trading in a 2005 Ford Expedition 4WD (792 g CO2e/mi) with 62,500 miles for a 2009 Ford Escape Hybrid 4WD (399 g CO2e/mi). The emissions are −16.2 tonnes and the voucher would be for $782.
Kumar 10:01AM (7/08/2009)
Yes, it definitely would apply to many many more drivers, and help the environment more if the silly 2-4 mpg increase in an SUV swap was eliminated.
The problem though, is that so few cars made by the big 3 would qualify. In a taxpayer funded program, it's understandable (yet still disappointing) that the rules help promote the purchase of vehicles that the big 3 are still geared to make.
nrb 10:36AM (7/08/2009)
contact, moving from 15mpg to 25mpg is going to make a lot bigger difference than moving from 35mpg to 45mpg.
Let's say you drive 10,000 miles per year.
15mpg = 666.6 gallons
25mpg = 400.0 gallons
Savings: 266.6 gallons
35mpg = 285.7 gallons
45mpg = 222.2 gallons
Savings: 63.7 gallons.
Night and day difference. The former saves more than four times as much fuel.
I still think the bill is just dumb, but that's been discussed to death.
Earl Killian 9:49AM (7/08/2009)
CARS is unfortunately more of an automaker stimulus than a help to greenhouse pollution.
Let's take the case of trading in an 18 MPG vehicle for a 22 MPG one. CARS is only useful when the value of the trade-in is less than the value of the voucher, so the trade-in must be pretty old, i.e. have a lot of mileage on it. Let's say the average trade-in has 100,000 miles on it, and so what is saved is on average 50,000 miles of low MPG operation. With the 18→22, that's 505 gallons, which represents 5.6 tonnes CO2e. Since the government paid $3500 on the voucher, it paid $624/tonne. The 2012 price in the EU trading system these days is around $21/tonne, so the US government is overpaying by 30×. Also, I am not even subtracting the CO2 emissions of building a new vehicle here, just crediting the savings from fuel.
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gorr 2:06PM (7/08/2009)
Taxmoney at work, destructing valuable cars and give subsidies to gasoline car that are the same. All these laws and regulations and subsidies and taxation are there to give even more money to the richs that lick as& 24/24 7/7 365 days a year.
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dallas bentley 1:38PM (7/10/2009)
I think the bill should be judged based on what good it "intends" to do.
If the goals really are to:
1 reduce carbon emissions first
2 reduce pollution
3 stimulate the economy
4 fund companies who endeavor to produce fuel-efficient vehicles
5 save money for most Americans
6 avoid expending more energy (on new cars and destruction of the old) and creating new waste in the process
then why don't they move away from trading old for new?
For $10,000 or so, you can retrofit gas engine for an electric electric one. Electric is cleaner and cheaper (1 and 2 and 5 satisfied - range is another matter). You would give money to "alternative energy" and related companies that provide the retrofit kits, the batteries and the installation services (3 and 4 satisfied). And, you don't trash the old car for a new one (6 satisfied).
The driver keeps their car, saves money on gas, pollutes less, contributes to green companies (stimulating a part of the economy), consumes fewer new products and reduces waste.
There are drawbacks to some of this (more battery waste, how you will fund it), but it could help. I'd like to hear your feedback.
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