Proposal Exempts Car Companies from CAFE

A weird but interesting minor provision of a new bill proposed by Senator Carl Levin, Democratic senator from Michigan, would exempt vehicle manufacturers from CAFE completely if the company in question commits to offering only vehicles powered by alternative fuels or “advanced technology” by 2020.

The overall proposal is called the “American Manufacturing Initiative” and is comprised of various tax breaks as well as changes to health plan policies, technology investment issues, and trade and currency regulations, all designed to assist the automakers with the transition to more fuel-efficient vehicles. Cost is unknown at this point.

The other Michigan senator, Senator Debbie Stabenow (D) of Michigan, is also involved with the American Manufacturing Initiative. Levin said the initiative will “focus on leap-ahead technologies, and we really want to have a major investment in those technologies, instead of focusing on those incremental changes”.

Levin intends to offer the bill as an alternative to the bill embraced by a majority of senators that requires all automakers to produce passenger vehicles that average 35 MPG by 2020. That bill is expected to come up for a vote in a few weeks.

Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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6 Comments

  1. What existing car company can meet that requirement? Unless, of course, advanced technology gets defined as something just a little better then what we have now.

  2. Can’t we just get rid of CAFE? It’s so bad and there must be something better we can think up.

  3. Doesn’t seem like the votes are there for this bill. Congress seems very intent on passing the higher CAFE requirements.

  4. I’lll tell what existing car company can meet that requirement: the one that’s already publicly said that they are going to have every vehicle in their line a hybrid by 2020. Toyota. What a trick these politicians will play on themselves if by trying to tilt the legislation to help the domestics, they actually end up helping Toyota.

  5. Even if CAFE gets increased, it’s a ways off, so by the time the requirements have to be met, they could have been made irrelvant by the existing technology, whatever it is. Hybrids, diesels, hydrogen, etc.

  6. This proposal has no more chance of passing than discovering tomorrow that Toyota is run by satanic wizards. I don’t think Congress is in the mood for “promises to do better”. This is going to add a lot more weight to the millstone around Detroit’s collective neck in terms of being compettive again. CAFE is stupid, but politicians love it because it puts all the responsibilty for reducing gas usage on the automakers instead of the government or the public or some combination of the two.

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