Create a Point-of-Sale Financial Incentive for High-Efficiency Vehicles (TLU Action 1.B.1)

Create a new vehicle point-of-sale "feebate," which would provide financial incentives to purchase vehicles that are high in fuel-efficiency and low in greenhouse gases emissions, accompanied by financial disincentives to purchase low-efficiency, high-CO2-emitting vehicles. A buyer of a new high-efficiency vehicle would be rewarded with a rebate, but a buyer of a low-efficiency vehicle would have to pay a fee or surcharge (hence the name "feebate"). An effective feebate would be about 5 percent of the vehicle price. The feebate could be administered in either of two ways: 1) at the point of sale (i.e., at the automobile retailer), or 2) at the initial vehicle registration. The program could be made virtually revenue-neutral by using the surcharges paid on low-efficiency vehicles to cover the rebates on high-efficiency vehicles.