Now we know why the automakers weren't screaming over the CAFE rules
When Transportation Secretary Mary Peters announced the first round of new CAFE rules last week, there was nary a peep from the automakers who had complained so vociferously about the the 35mpg standard in the first place. Now there is a clue as to why they have been so quiet. Until now, the fuel economy rules have always been pretty simple. There was a threshold for each model year (currently 27.5mpg for cars) and the sales weighted average for all cars sold by a manufacturer had to beat that level. All companies had the same threshold. If they fell short they paid fines and if they exceeded it they could earn credits towards future years. Now it's much more complicated. There is a sliding scale based on the footprint of each individual vehicle. The footprint is defined as the wheelbase times the average of the track width or the area within the wheels. The larger the footprint, the lower the threshold that vehicle has to meet. Therefore for two cars of similar overall size but one with a longer wheelbase, the longer one would have a lower mileage requirement. Each automaker is then assigned an individual threshold to meet based on the sales weighted average footprint of the vehicles it sells. A company that sells more large footprint vehicles would have a lower hurdle to jump. One that sells predominantly smaller cars would have to get better mileage. As a result a company like Porsche or Ferrari who sell relatively small sports cars would have to meet a higher standard than Ford or General Motors who sell more large trucks. The entire premise of this rule is absurd. This rule will likely have the effect of giving manufacturers an incentive to maximize the wheelbase and track of new vehicles in order to minimize their CAFE requirement.
The only saving grace here is that, overall, as fuel prices continue to climb, buyers are likely to migrate to more efficient vehicles regardless of the footprint.
[Source: NHTSA, AutoWeek]
Reader Comments (Page 1 of 2)
EVan 8:51PM (4/28/2008)
Dang. That just seems dumb. Not only will the rule probably be ineffective, but it's most likely going to result in some ugly looking cars.
I wish the regulators would drop the whole CAFE thing anyways and just let the market sort it out. Cheap oil is not coming back, I really don't think these regulations are necessary.
Reply
Zigster 9:06AM (4/29/2008)
time to bring back the Aston Martin Lagonda
Reply
psarhjinian 9:43PM (4/28/2008)
So no penalty for mass or height, and no bonus for effective packaging? Looks like the "light truck" boondoggle all over again: just take an existing car, jack it up six to eight inches and suddenly you can charge more, while not having to worry about CAFE.
This rule was pretty much bought and paid for by truckmakers. It's also why I'll support California's methodology (emissions only) or Europe (displacement and taxation) eight days a week.
Reply
ph39 10:08PM (4/28/2008)
psarhjinian,
no - jacking up a car does not change its footprint - therefore it does not change the cafe requirements. This system isn't perfect - but the old system was flawed also.
A company that specialized in small cars had to make no improvements at all. As a matter a fact - they were encouraged to make large trucks because the had "extra cafe" credits that they could use.
Reply
mike 10:11PM (4/28/2008)
So, this was just about "How do we FOOL the Public, while Doing NOTHING".
Time to get these CEO's FIRED.
Reply
Joseph 12:15AM (4/29/2008)
Stupid, stupid, stupid...
The great thing about simplicity is that it inherently solves all the little details.
The old rule was simple, and did it's job: raise ruel economy. It may not have been perfect, but this new rule is just shameful.
Reply
tark 12:52AM (4/29/2008)
Evan is right cheap gas isn't coming back. The buyoff of legislators by the big 3 won't save them if they can't come up with better mpg. The real tragedy was they also added a part where states can't regulate greenhouse gas's since the supreme court said they could under current laws.
Reply
gsolman6 3:58AM (4/29/2008)
"no - jacking up a car does not change its footprint - therefore it does not change the cafe requirements. This system isn't perfect - but the old system was flawed also."
I think he was referring to the likes of the Subaru Legacy and PT Cruiser, cars which were slightly modified and lobbied to qualify as trucks.
Yes California's system is looking better every day. Not as much incentive for diesels (due to the extra energy and CO2 byproduct per gallon) or ethanol. No class distinction and a higher standard overall. That system will bring about European class cars and substantial CO2 reductions.
Reply
NANCY HAZEL 6:01AM (4/29/2008)
LOOKING AT HYBRIDS, AMERICAN MAKERS ALL STATE LIMITED AVAILABILITY; SALESPEOPLE HAVE THE INTELLIGENCE KNOWLEDGE OF EVEN LESS LIMITED. USA AUTOS CAN'T EVEN COMPARE WITH TOYOTA. WHEN WILL WE WAKE UP? MY INCOME IS TIGHT, I NEED TO SURVIVE BY MAKING THE BEST DEAL I CAN! GAS PRICES ARE KILLING MY BUDGET; I AM LUCKY TO GET A 3% INCREASE YEARLY; YET GAS TAKES EVERY BIT OF IT & MORE. USA DEALERS LEAD YOU TO A 4 CYCL. GAS ENGINE, AND ARE CLUELESS TO WHAT THEIR COMPETITION OFFERS.
Reply
Lad 7:15AM (4/29/2008)
What's getting lost in all this is the concern for the American people's health and the health of the planet. Don't be mislead, this idea was brokered by The AAM and the politically run Fed Departments to weaken state's rights.
I would like to believe market forces will reduce GHGs by price pressures and I believe in time it would happen in a free market. Problem is the American auto market is not a free market in any way or form because long ago auto lobbyists (The AAM) have been successful in tilting the field toward fossil burning ICEs. If you don't think that The AAM (auto lobby) and The API (oil lobby) plan the auto market and influence the Bush Politicos to carry out their plans, then you must still be holding on to the ultimate idea in transportation...flying raindeer!
Reply
motorman 8:03AM (4/29/2008)
if we could get everyone that is in favor of these new rules to BUY a new car it would help solve the problem BUT they just talk not buy. most people understand that you can buy a lot of gasoline for what it cost you to trade down to a smaller fuel efficient car. most people could cut their fuel bill a lot just by doing things like not driving their kids a lot of miles just to play sports or even car pool.
Reply
pacman 9:06AM (4/29/2008)
I agree this is stupid but it does not matter. Gas is going to be $5 bucks as gallon in 6 months (when gas prices level out with crude oil prices, gas is still much less). The market will force more fuel effeciancy out of consumer demand - just as in Europe. Europeans would drive bigger cars if fuel was a cheap* as it is in the US. People wont run out and trade down (thats really a dumb way to save money) but when they need a new car they will be shopping for fuel efficiancy (unless they are a dumbass.) The fuel efficiant cars are already increasing in sales while the large SUVs are sitting on lots.
Reply
rob 9:55AM (4/29/2008)
Of course there is an unintended upside to this formula: safety. If the car companies maximize wheelbase they will put more structure between the passengers and the object their vehicle is hitting (front/rear impact). The other part of the footprint formula also applies: trackwidth. More structure between the passenger and the object hitting them (side impact).
I wonder how the economics of this formula actually works out? Adding more structure to the vehicle will require more steel/aluminum/plastic. The question is whether the run-up in raw material costs and the increased useage of raw material is higher than the CAFE penalty. Plus there is the mass penalty...does the mass increase offset the formuula eeffect?
Reply
mroverlord 10:01AM (4/29/2008)
I say leave it to the markets, and just let the gov't mandate clean air requirements. I've lowered my fuel bill $600/yr just buying a smaller truck, plus I don't use the drive-thru or idle my vehicle needlessly...common sense goes a long way.
I want a small diesel pickup!!!! (4 banger, 6 spd dual clutch auto).
Reply
Danielle Andre 10:03AM (4/29/2008)
Just another way to dodge the bullet. I think you're right, Evan. The market is going to sort these things out anyway.
Reply
RIck 10:40AM (4/29/2008)
Bingo. Loophole!! Now I understand why some companies were keeping a low profile. This rule changes nothing, they're still going to spit out big vehicles.
Reply
Steve C 11:13AM (4/29/2008)
Remember the phrase from Ronald Reagan:
"The most dangerous nine words in the English language are - "I'm from the government and I'm here to help" ".
Reply
Josh 3:12PM (4/29/2008)
Wow.
The stupidity in this thread just floors me. First off, do you people actually think the struggling Detroit companies have the money to buy lawmakers? If anyone "bought" anything, it was Toyota with it's massive hoards of cash. Toyota was lobbying harder than Detroit against these regulations because they just invested billions into a large truck program (You know, the one that people like you all seem to ignore) And what of the VERY RICH oil companies? Secondly, we all know this legislation is ignorant, even the automakers. Blame your government for screwing everything up (as usual) If they want people to use less energy, they need to 1) up the price of gas and 2) make newer, more efficient models available to the increasingly poverty stricken public. CAFE will ad a bit of efficiency to new cars and more noticably $$$. This will in turn cause more people to keep older models longer or flat out buy older models. Displacement tax is ignorant because displacement does not equal inefficiency, not to mention a lot of people actually NEED trucks to do work (I know this is a new concept to most of you) It's very easy to get good mileage out of a V8 sports car, so long as it is light. Efficiency is a weight game and thanks to the government mandating tons of mundane safety equipment, cars now weigh TOO MUCH. C'mon guys; wake up and smell the 93 octane, it isn't always about 'the man' screwing you over. It's much more logical than vendettas.
Reply
bill 3:26PM (4/29/2008)
Democrats, dumb rules for cafe, dumb rules for ethanol, dumb rules for fixing the gas prices. Democrats, just plain dumb.
Democrats will have the rest of the fuel market pouched up faster than Democrat Jimmy Carter did ... Jimmy Carter would be proud.
Reply
Juan Esperanzo 3:35PM (4/29/2008)
CAFE is a silly way to mandate vehicles to have greater fuel efficiency, and in many ways it's completely counterproductive.
A big reason why Americans gravitated towards big SUV's is because car companies were unable to produce large cars that met consumers needs as a result of CAFE standards, so they instead bought huge barges when all they really needed was a car that was big enough to put a few kids in the back. But carmakers couldn't make these cars because it would ruin their CAFE standing, so they found a loophole.
People who buy gas guzzlers are being penalized, believe me, both in the greater amount of taxes they pay because of all the extra fuel they consume, and with the new high cost of fuel.
A few $500 a month gas bills will put a lot of consumers into a hybrid real quick.
Let consumers instead of bureaucrats decide on their own what vehicle meets their needs, and let them deal with the consequences.
Reply