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Vehicle Scrappage Bill Introduced in Both US Senate and House
14 January 2009
A measure introduced by US Senators Dianne Feinstein (D-CA), Susan Collins (R-ME), and Charles Schumer (D-NY) would establish a national voucher program to encourage drivers to trade in older, less fuel efficient cars, trucks or SUVs for a more fuel-efficient vehicles or to use mass transit. Companion legislation was also introduced in the House by Representatives Steve Israel (D-NY), Jay Inslee (D-WA), Barbara Lee (D-CA), and Dennis Moore (D-KS).
The Accelerated Retirement of Inefficient Vehicles Retirement Act of 2009 (ARIVA)—also called the “Cash for Clunkers” program—would reimburse drivers with a credit of up to $4,500 for scrapping vehicles with a when-new fuel economy rating of less than 18 mpg US as reported by the original manufacturer for purposes of CAFE compliance. (CAFE compliance figures are lower than the adjusted EPA fuel economy ratings for consumers.)
Eligible drivers would receive a reimbursement voucher for the purchase of a new or used vehicle with a fuel economy rating that exceeds the CAFE target for that class of vehicle by at least 25%. The bill also requires that the voucher be used towards the purchase of a vehicle that has an MSRP of less than $45,000, is model year 2004 or later, and meets or exceeds federal emissions standards. Drivers who apply for the program must ensure that their vehicles are in driveable condition and are currently registered in the US.
Vouchers could also be redeemed for transit fares for participating local public transportation agencies. The program would operate for four years, from 2000-2012, and is expected to encourage the early retirement of up to one million vehicles per year.
The bill specifies that during the first year of the program, vouchers will be issued for the following amounts:
|First-year ARIVA Voucher Amounts|
|Model Year||New Vehicle Purchase||Used Vehicle Purchase||Mass Transit Credit|
|2002 and later||$4,500||$3,000||$3,000|
|1998 and earlier||$2,000||$1,500||$1,500|
In each subsequent year (2010, 2011, and 2012), the model years would be advanced by one year. Vouchers would be eligible for redemption for up to two years after the date of issuance, and no individual would be eligible to obtain more than one voucher in any three-year period. Dealers, dismantlers and scrap recycling facilities would also be eligible for a payment of $50 per vehicle, or an alternative amount to be specified by the Department of Energy.
Last Congress, we successfully enacted legislation...to improve the fuel efficiency of America’s fleet of new cars, trucks and SUVs by at least 10 miles per gallon over 10 years. But we face real challenges with trying to encourage drivers to trade in their older, less fuel efficient vehicles—particularly in this tough economic climate. This bill will help address that problem...If enacted, this bill would be an important part of helping getting America’s struggling automobile industry back on its feet—and help consumers who are concerned about covering the cost of buying a more fuel efficient vehicle.—Senator Feinstein
If implemented,the program would, as estimated by the American Council for an Energy-Efficient Economy (ACEEE):
Save between 40,000 to 80,000 barrels per day of motor fuel by the end of the fourth year, (based on an estimated 500,000 to 1,000,000 vouchers issued per year).
Reduce greenhouse gas emissions between 6.6 million metric tons to 7.6 million metric tons, or the equivalent of removing 1.1 million to 2.2 million vehicles from the road in one year, (based on an estimated 500,000 to 1,000,000 vouchers issued per year).
Reduce NOx by 3,043 short tons (2,761 metric tons) by 2013, (based on an estimated 500,000 to 1,000,000 vouchers issued per year).
While participation in the voluntary program is hard to gauge, ACEEE said, its preliminary estimates are that 575,000 vehicles would be retired annually, and that fuel savings would reach 46,000 barrels per day by 2013.
ACEEE white paper on accelerated vehicle retirement
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