Compromise fuel economy bill could be close
After months of wrangling over new fuel economy standards it appears that members from the House and Senate may finally be close to a compromise deal. According to a report from the Detroit Free Press, the 35 mpg standard by 2020 from the Senate bill would be retained. However two important aspects of current standards and the Hill-Terry bill would be restored. The calculation of separate averages for cars and trucks as well as distinct averages for import and domestic fleets would be back. It appears that there will be separate targets for vehicles based on weight allowing larger vehicles to meet a lower standard but a hard target that the overall fleet average must meet as well. If that happens, any company that wants to build bigger thirstier trucks would have to offset them with smaller, more efficient vehicles.
The separate domestic/import fleet averages would help keep some small car production in the US because the more efficient vehicles would offset the larger vehicles in the domestic fleets. If all vehicles are calculated together, the car makers are more likely to send production of less profitable small cars overseas. While this separate averaging has surely helped to keep some small car production here for the past two decades, it may actually be a moot point now as the value of the dollar continues to drop into the toilet.
[Source: Detroit Free Press]
Reader Comments (Page 1 of 1)
BlackbirdHighway 3:30PM (11/27/2007)
I think I'm starting to see the problem with the CAFE standard.
Not only does it have to reduce fuel consumption, it also has to protect automaker profits, give even more protection to domestic automakers, protect makers of big vehicles, protect US autoworker's jobs, not piss off consumers too much, keep lawmakers winning re-elections, etc.
In other words, it has to be all things to all people, which of course is impossible. Thus, it is doomed to failure.
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Joseph 6:46PM (11/27/2007)
"separate domestic/import fleet averages"
Wait, that doesn't exist in the current CAFE.
Making the mpg standards higher/lower just because they are import/domestic seems very unfair.
However, it would be for the sake of keeping small cars produced in the U.S. CAFE is more complicated than it seems. :(
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mrbell321 6:14PM (11/27/2007)
The problem is that people believe it should be all things to all people. It only should be the best thing for the most people. US automakers don't need governmental protection from their own failures. UAW doesn't need any protection, it just needs to go away.
Splitting up economy standards between car and truck and allowing heavier vehicles to have lower emissions defeats the purpose of improving standards. The easy solution automakers will take is going to be "build bigger vehicles" which is exactly wrong.
...but then, that's what CAFE has been doing for the last 20 years...
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Sam Abuelsamid 8:52PM (11/27/2007)
Joseph, I think you misunderstand. The standard is the same regardless of domestic/import status. It's just that all domestics from a manufacturer are lumped together and they have to meet a certain sales weighted average. Similarly, the imports are calculated separately but have to meet the same average. For example Honda Civics and Accords built in North America are counted separately from the units that come from Japan which are also lumped in with Fits. The split means that some of the higher mileage cars will need to be produced here to balance out the larger vehicles.
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Yggdrasilly 10:45AM (11/28/2007)
Hm. OK, so it ISN'T a case of "every Prius you buy lets Toyota sell two Tundras:" the import/domestic split prevents that, albeit as an unintended consequence of keeping small-car (and now, I guess, hybrid-car) production in America.
And the average is "sales weighted?" How does that work? Is it based on predicted sales or past sales, and how do they calculate the effect on a manufacturer's CAFE average when that manufacturer introduces a new model at one end or the other of the extreme?
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Sam Abuelsamid 11:09AM (11/28/2007)
Sales weighting the average takes the mileage of a given vehicle and multiplying it by the number of units sold of that vehicle and dividing by total sales for the brand. For example if Toyota sells 100,000 Tundras at 15 mpg and 100,000 Corollas at 30 mpg, that would be ((100,000 * 15) + (100,000 * 30)) / 200,000 = 22.5 mpg fleet average. If the number of 15 mpg vehicles doubles and the 30 mpg vehicles stays constant, the average drops to 20 mpg. If the number of 15 mpg drops to 10,000 the average goes to 28.64 mpg.
At the end of each model year the fleet averages are calculated based on actual sales during the model year. If a manufacturer falls short of the standard during the preceeding year, the relevant fines are levied after any credits are factored in. If a car-maker exceeds the standards they can earn credits to be used in future years much as losses can be used to offset future tax bills in the future. They also get credits for alternative fuel vehicles sold, such as E85 flex-fuel. If a car maker introduces a particularly thrifty or thirsty model it gets factored in the same way as any other vehicle based on it's sales. It they only sell a few hundred or a few thousand out of millions it won't have much impact either way. In that way a couple of thousand Dodge Vipers have relatively little influence on Chrysler's overall fleet average. Similarly a couple of thousand Chevy Volts would have relatively little influence.
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Tim 11:42AM (11/28/2007)
Sam is correct and that is why GM's plan is to set the eco bar in each CLASS of vehicle. If all automakers try to outdo each other by increasing the fuel efficiency of each class, we all win. After all, not everyone wants to drive a diesel beetle and eat granola even though others would like to FORCE them to.
It’s a free market and GM is finally listening. I wish our elected officials actually listened to "We the People" instead of the special interest lobbing dollars.
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