Auto buybacks: Cash for ICE — Accelerating the Transition to EVs (and AVs while we are at it)

One of the undiscussed features of transport electrification is the large number of internal combustion engine (ICE) vehicles that will remain on the road in the absence of prohibition.

There are many stranded incumbents like service stations and their upstream suppliers who will continue to provide fuel for the remaining vehicles, and that fuel will have a lower and lower market price (sans taxes), as demand will have dropped and the supply will not, and existing producers will have huge incentives to pump fuel while it still has some market value.

Consumers with older cars will be reluctant to replace their working vehicle when low fuel prices abound. Many just like their cars, and the smell of gasoline is an attractant for some.

To accelerate the transition, governments will step in and buy back older cars for recycling. At first this will be voluntary, then it will be mandatory.

Governments won’t simply confiscate property, that goes to far. Instead governments will refuse to register vehicles that pollute above some threshold, for instance, (a threshold that rises over time) and thereby keep those vehicles off public roads, only a few antiques will be permitted in the end, and then only for limited parades and displays. This will be the UK’s Scrappage Scheme or US’s Cash for Clunkers on steroids.

Some back of the envelope math follows: There are say 300,000,000 cars in the US by the time this gets going. (There are 286 million now!). Assume all new vehicles, and 50% of extant vehicle are electric (so this is circa mid 2030s, since by 2025 most new cars will be EVs and by 2030 essentially all new cars will be EVs). There remain 150,000,000 ICE cars left. At ~$5,000 per used ICE car, that would be $750,000,000,000 ($750B). To be clear, $750B is apparently not what it used to be, and since it would probably have to be phased in over time (say 10 years), it is only $75B/year for 10 years. (Or ~$250 per US taxpayer, or less than $1/day for 10 years to pay for an accelerated all-electric fleet).

I imagine this is implemented as $5,000 credit for trade-in toward an EV, but this would vary by vehicle of course, and rules would have to be in place about only registered and operational vehicles would be eligible to avoid paying for the wrecks in people’s garages or on their front lawns.

Those turned in cars could be recycled, scrapped for parts, or converted if EV conversion technology becomes feasible, though I suspect recycling will be more cost-effective.

This transition would have many environmental and economic stimulus benefits, since these remaining ICEs would, on average, be inside older more polluting vehicles.

Whether this is economically worthwhile, or the best means to reduce carbon emissions, is another matter. However will this happen? Yes, in some form. The 2031 recession, or the 2037 recession at the latest will result in a program just like this.

[Those new EVs, by the mid-2030s, will also be Level 4 AVs for all intents and purposes, so this has numerous other safety benefits].

Photo by Pixabay on

Transportist: April 2021

USDOT Secretary Pete Buttigieg recently said something not negative about Vehicle Mileage Traveled taxes (VMT taxes) . This raised a minor furore among the left, claiming inequity. Road pricing has long been criticised over equity issues, but to be clear, all taxes (including today’s fuel taxes) are somewhat distortive. But we don’t want to excessively subsidize road travel (which has a lot of negative externalities). So VMT taxes are a good thing, (especially for EVs, fuel taxes are fine for ICEs), and they are not worse than most alternatives. 

I think that like other goods and services, roads should be paid for by users, and driving (including driving by electric vehicle) should be discouraged. 

We should phase-in road pricing one Electric Vehicle at a time.

[Sorry, no new posts this month, they were all stuck on containers ships in the Suez Canal on their way to press. Read this by my colleague Michael Bell instead.] 



Urban Findings is launching soon. We are plotting Energy Findings now. If you are interested, let me know. The journal continues to solicit articles of under 1000 words that have clear research questions, methods, and findings.

  • Aoustin, Louise, and David Matthew Levinson. 2021. “The Perception of Access in Sydney.” Findings, March.
  • Mothilal Bhagavathy, Sivapriya, Hannah Budnitz, Tim Schwanen, and Malcolm McCulloch. 2021. “Impact of Charging Rates on Electric Vehicle Battery Life.” Findings, March.
  • Aldred, Rachel, and Anna Goodman. 2021. “The Impact of Low Traffic Neighbourhoods on Active Travel, Car Use, and Perceptions of Local Environment during the COVID-19 Pandemic.” Findings, March.
  • Aman, Javad J. C., and Janille Smith-Colin. 2021. “Leveraging Social Media to Understand Public Perceptions toward Micromobility Policies: The Dallas Scooter Ban Case.” Findings, March.
  • Lanaud, Elsa, Andres Ladino, and Christine Buisson. 2021. “First Observations about Response Times and Connectivity in a Vehicles Platooning Experiment.” Findings, March.
  • Pereira, Rafael H. M., Marcus Saraiva, Daniel Herszenhut, Carlos Kaue Vieira Braga, and Matthew Wigginton Conway. 2021. “R5r: Rapid Realistic Routing on Multimodal Transport Networks with R5 in R.” Findings, March.
  • Lehe, Lewis, and David Levinson. 2021. “The Economics of Findings.” Findings, March.

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