AEP to Sell Captured CO2 to SemGreen for Enhanced Oil Recovery
REGI US Completes Prototype RadMax Pump

Tweaking Cars to Improve Position in Canada’s Feebate Program

Globe and Mail. Automakers are tweaking models that are on sale in Canada to improve their position within Canada’s feebate scheme—either, as in the case of Honda, to quality for the rebate; or to reduce the assessed penalties.

The manual tranmission model of the 2008 Honda Fit is eligible for the $1,000 rebate after honda engineers tweaked it to consume one-10th of a liter less gasoline per 100 km than the 2007 model.

Cars that consume 6.5 liters to go 100 kilometers, light trucks that use 8.3 liters of gas and vehicles consuming 13 liters of E-85 ethanol are eligible for rebates.

Auto makers wouldn’t identify vehicles, but an examination of fuel consumption figures on some of their websites shows that some vehicles that did not qualify for rebates in the 2007 model year are eligible in 2008.

That examination reveals that rebates for some vehicles increase, there are some new vehicles for 2008 that qualify and the fees levied on several gas guzzlers will fall because they have new, more efficient engines or because auto makers have slimmed them down.

(A hat-tip to Bob!)



I'm divided about this. On the one hand, the feebate is having, in some way, its intended incentive effect: Manufacturers are making efforts to increase economy. But I'm not convinced that, in the absence of this feebate, making a serious engineering effort to shave 0.1 L/100km of a 6.5 figure is a cost effective or useful thing to do. Could the companies have spent this scarce and expensive engineering time on something more productive?

Personally, I think the feebate should be aimed at shifting consumer behavior, and not stimulating manufacturers to perform strange contortions to meet an arbitrary cut-off. Basically, manufacturers would keep the same offerings and have a diffuse incentive to improve economy at whatever point is easiest, and customers would have a price incentive to choose econony.

To reach this goal, a sliding-scale or formula approach could be used. It could be something like: For every 0.1 L/100 km the car consumes above 8.5, the buyer pays a tax of $500. Similarly, consumption below 8.5 is rewarded. This way, the thresholds are so close that there is no "falling off a cliff" effect. A car that got 7.4 would see a rebate of $550, while a car that got 8.6 would see a tax of $50.

My point is that under the current system, if you have a car getting 6.6, that last 0.1 of economy is essentially worth $1000 per car, just because of the rigid way the rules were written. Under a sliding scale, that last 0.1 is worth just as much as every other 0.1 is worth ($50), and engineers can be free to spend their time most productively. The reason I chose 0.1 is that it is the level of accuracy to which economy numbers are reported. If they start to be reported down to the 0.01, then you'd just say that each of those is worth $5.

Imagine a company has two cars in its fleet, and both sell equally well. Both will be driven the same average distance by the consumers who buy them. One gets a 6.6 economy figure and the other gets 8.9. Imagine the company has a group of engineers on staff who could tweak the 6.6 down to 6.5, or the 8.9 down to 8.7, but not both at the same time. We would all agree that tweaking the 8.9 down to 8.7 is more productive, yet if the 6.6 car is near a steep feebate threshold and the 8.9 car is not, they will focus on the "wrong" car. That's what I think is happening right now, and I'm sorry to see the resources and effort misapplied.


Correction: I meant to say $50, not $500, in the formula above. Finger slipped.


I think it depends on the size of the market.
If the country is large (Canada, UK, Germany, US, China etc. ) you can have hard limits like these and the companies will do something about it - thus you get some payback.
But if the country is small (Ireland say) it is not worth the companies' while to modify the cars.
Unless, you had EU wide standards ...


I agree with NBK-Boston's graduated Feebate system. I would heartily welcome such a system for the US market!

Perhaps then those of us who drive regular cars can let out a collective sigh of relief when we don't have to worry about getting hit by HUMMERS, Escalades, Suburbans, Navigators, Sequoias, Tundras, Titans, F-150's etc, etc.


It's interesting when you convert those numbers into BTU/mile.

An ethanol vehicle need only be about as efficient as a diesel light truck to qualify for the feebate. That's about 43% more energy per mile than a gasoline car in this program.

Harvey D


I agree with you that a bi-directional sliding scale feebate program could be more effective. The pivot points could be reviewed every 2 or 3 years to keep in line with the industry development and keep the program revenue neutral as buying habits and attitudes change.

However, the value of each step should be increased by 10% to 20% every year to pass a progressively stronger message to the manufacturers and buyers.

Too bad that larger pick-up and similar gas guzzlers are partially or totally excluded. Western Canada voters have to be considered when a general election may be called on short notice.

patty fischer

my niece just bought a 09, aveo and I was wondering is she able to get the tax rebate for buying a standard transmission car?

The comments to this entry are closed.