Cash For Clunkers Could Return With An Electric Twist

The result of the 2020 US presidential election in November will dictate many things, among them America's energy policy for potentially years to come. The coronavirus pandemic has caused an economic slowdown expected to start a recession for who knows who long. But one thing is certain: never let a crisis go to waste. Former vice president and expected Democratic presidential nominee Joe Biden has just released his climate plan on Periscope and it's interesting for several reasons, one being that it calls for bringing back the Cash for Clunkers program.

This $3 billion program was originally enacted during the Great Recession in 2009 with two goals: get consumers to spend money by buying new vehicles, and to get older, less fuel-efficient vehicles off the road in favor of greener vehicles. The program worked extremely well but ended after only two months.

Biden's newly proposed plan calls for offering rebates and other incentives to consumers to not only buy new vehicles, but to purchase more environmentally-friendly electric vehicles like the Nissan Leaf, Hyundai Kona EV, and upcoming Volkswagen ID.4. But the plan doesn't end there. It also calls for replacing the US government's large fleet of vehicles with American-built electric ones.

Despite the many expected challenges to get such a bill passed (if Biden is elected), the sudden demand for American-built vehicles would likely lead to job creation, something also desperately needed. A potential Biden administration probably wouldn't have too much difficulty finding auto industry support for its plan. General Motors CEO Mary Barra recently voiced her support for the initiative.

She said GM has been discussing the matter with the current Trump administration as well as with other automakers. "Getting some of the oldest vehicles off the road would definitely help from an environmental perspective," Barra said. "And we do think that in the few years out, continuing to stimulate EV demand… getting people into EVs so that they can understand the benefits of EVs as we work to have a full portfolio and a robust charging infrastructure, I think that's going to be important as well."

At the moment, a new version of Cash for Clunkers doesn't appear to be happening, but Barra made clear GM does not seek any permanent subsidies, a belief shared by its rivals.