CAFE Alternative May Be Pushed By Auto Companies

As we reported (story here) on May 19, there is an alternative proposal to the potential new CAFE standards bill. That new CAFE standards bill is currently on its way to a vote in the Senate in the very near future.

The alternative proposal is being championed by Carl Levin, the senior senator from Michigan, and, as you might reasonably expect, an auto-industry advocate. Among the Levin proposal’s draft provisions are increases in average car fuel economy to 36 mpg by 2022 and increases in average truck fuel economy to 30 mpg by 2025. The Alliance of Automotive Manufacturers, an industry group that includes Toyota, the Big 3, and five other auto manufacturers, is considering getting behind the Levin proposal in an attempt to substitute the requirements of the Levin proposal for the stated terms of the new CAFE bill.

The new CAFE bill requires a fleet-wide average (both cars and trucks) of 35 mpg by 2020, and subsequent improvements of 4% a year thereafter until 2030. Just the mandate for calendar year 2020 means a whopping 40% increase in fuel efficiency from the current blended average will be required, since the average mpg for cars is currently 27.5 mpg and the average mpg for trucks is 22.2 mpg.

And that just satisfies the 2020 requirement. The annual 4% improvements required each year from the 2020 level until calendar year 2030 are the CAFE equivalent of compound interest being added to your credit card balance every month. It is impossible to achieve with current gasoline engine technology unless the federal government is also prepared to require a large percentage of consumers to purchase very small vehicles. If the federal government is not going to require citizens to buy a certain kind and size of car, then the standards in the new CAFE bill can only be met by technologies like plug-in hybrids, hydrogen-gas hybrid or all-hydrogen/all-electric vehicles.

There are “off-ramps” in the current bill that would allow the government to suspend the mpg requirements if the requirements are found to be too expensive or technologically unfeasible, but environmental advocates are working like mad behind the scenes to close those loopholes before the vote, since a suspension is viewed as a likely occurrence if the loophole exists. Another off-ramp is the one we commented on in the May 19 article, which allows a complete exemption from CAFE requirements from now until 2020 to any automaker that promises that all of their vehicles will be powered by alternative energy by 2020.

Auto industry executives view the increases in fuel mileage requirements mandated in the new CAFE bill as onerous, untenable and wildly unrealistic. Lawmakers, however, are in a take-no-prisoners mood regarding both fuel economy and greenhouse gas emissions from automobiles and are not likely to go along with any attempts by the auto industry or their ever-decreasing friends in the House and the Senate to just make the bill go away. Hence the consideration of the substitute measure from Sen. Levin.

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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9 Comments

  1. I’m sick of the auto companies making excuses. They have the technology to give us more fuel-efficient cars so why don’t they just shut up and do it? They need to be responsible for once and do the right thing instead of continuing to put out these huge suv’s. Lots of people would buy a a car that got 50 mpg if it was available. I think the car companies are in this with the oil companies. It’s all just a scheme to keep using more oil. We could have electric cars tomorrow if someone would just make one and put it on the market. The car companies are the ones to blame.

  2. fedupinfl, the companies that make SUVs make those vehicles because they can sell them, plain and simple. If people stopped buying SUVs, then the auto companies would stop making them very quickly. You say lots of people in the US would buy a 50 MPG car if it was available, but hardly anyone buys the 40 MPG cars that are available, so I think you just have very little knowledge of the retail auto marketplace. If you want to place the blame for why we don’t have a long list of 50 MPG cars to choose from, look at the consumers in the US and look at the government for keeping gas so cheap. I think you must be an idiot to have such a poorly-formed opinon on this subject.

  3. Don’t soft-pedal it, lottaburger! Tell us how you really feel about fedupinfl!

  4. Well, I think the auto companies could do better, that’s for sure. I know it’s tough, but they could do better than we they’ve done, especially the Big Three.

  5. Nothing is going to change regarding the volume of gas consumed until there is something to replace the internal-combustion engine in cars. And I mean something that actually is usable and isn’t too expensive to buy, like an electric car with a range of 300 miles that doesn’t cost anymore than it’s gasoline counterpart.

  6. CAFE is ridculous, sure, but tell me what would work better? Something has to be done, and CAFE is what we have to work with.

  7. Bob Barker – one thing that would work a lot better (and a lot faster) than CAFE would be an increase in the gas tax. Balance it out with a decrease in the income tax to make it tax-neautral, so nobody gets their hair mussed, and, VOILA! Gas consumption starts going down fast, and we never have to hear about stupid CAFE again.

  8. A higher gas tax would cripple this economy! I don’t care how you think you can balance it out. The economy will go down the toilet! We already pay too much for gas besides. Gas should be a dollar a gallon! Take all the taxes off it and drill for oil everwhere in U.S. territory and build a lot more refineries. That’s the answer! Don’t let these environmentalists ruin our great countyr! Eco-liberals are the new face of communism!!!!!

  9. askmewy, you and people like you are the reason the earth is getting so screwed up. You cannot just keep raping and pillaging Mother Nature and expect nothing bad to happen. And now that bad things are starting to happen, people like you are in full-scale denial that they are happening!

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