Automotive Fuel Economy Manufacturing Incentives for Alternative Fuel Vehicles

Résumé

To provide an incentive for the production of vehicles that can operate on certain alternative fuels as well as on regular petroleum fuels, Congress established a special procedure for calculating the fuel economy of those vehicles for the purpose of determining compliance with the Corporate Average Fuel Economy standards. This procedure increases the fuel economy attributed to such "dual-fueled" vehicles, thus facilitating compliance with those standards. By statute, the incentive is available through the end of the 2004 model year and may be extended by up to four additional years through rulemaking. This document proposes to extend the availability of the incentive by four years, i.e., through the end of the 2008 model year.