[Drive-by]

> Economists estimate these credits could be worth billions: a vast cross-subsidy invented by bureaucrats and paid for by every person who buys a new gasoline-powered car.

The piece asserts that buyers of new ICE cars pay this subsidy, but has no description of how new car buyers pay it. Do they really? How much is it? How does that compare to the externalized costs of burning gasoline?

[aksss]

Near as I can tell, it works like this:

a manufacturer has to meet certain MPG standards for its cars and trucks; the aggregate calculation is their CAFE (Corporate Average Fuel Economy) score. To the degree their model year vehicles fail to meet the standard, the company will owe civil penalties (cash).

To the degree a company can beat the standard, by say, making a "compliance" car that runs at 30MPG, they receive a credit. They can offset the suckiness of their truck line that didn't meet the standard with credits from their other models. There are credit multipliers for putting in certain energy saving technologies, and a huge multiplier for producing an EV.

If you run a surplus of credits, they're as good as gold - you can sell your credits to other manufacturers that need them. And you can store up these credits y/y as well.

So Toyota or Tesla, which run a habitual surplus of credits, make a boat load of money selling their excess credits to the likes of VW.

So who really pays for that?? The credit is kind of fiat, right? The government endows you with the credit for beating a goal, but it has cash value. The buying company pays real money for it, and that certainly gets baked into the cost of the vehicles they produce (passed on to the buyer).