By on July 11, 2011

When the White House opened negotiations over the next round of CAFE regulations for 2017-2025, I reckoned the automakers and regulators were “working in nearly unprecedented harmony.” Well, not so much any more. The WSJ [sub] reports that, although work on “the big number” is proceeding well, in the words of IHS Automotive’s Michael Robinet

This becomes a lot more politically divisive as they become much more specific in terms of the footprint of the vehicle.

In short, the original sin of CAFE, the two-tier system that drove SUV “light truck” sales and saw the creation of “trucks” like the PT Cruiser and HHR, has returned to haunt the latest round of negotiations. And, according to the WSJ, Japanese and Korean manufacturers are complaining that the new rules will motivate consumers to buy less-efficient offerings, and in turn give the Detroit manufacturers an unfair advantage. The kumbayas are over, and the gloves are off… but just how unfair are the newly-proposed rules?

It’s been said that only a handful of experts truly understand the details of CAFE compliance, with its complex system of footprint-based categories, formula and credits. But, according to The WSJ, the basic problem brought up by the Asian automakers is as follows:

Historically, U.S. fuel-economy requirements, while intended to push auto makers to build more fuel-efficient cars, instead helped spawn the SUV craze of the 1990s as U.S. auto makers pushed more of their fleets into the “light truck” category where rules were more lenient.

Now, however, auto makers must hit targets both by segment and for their overall U.S. vehicle fleets, with standards tied more closely to a vehicle’s size. The new standards being floated by the Obama administration—which would roughly double the fleet target to 56.2 miles a gallon by 2025—revise the scale that determines targets for each vehicle segment.

A small SUV such as Honda’s CRV, for instance, would need to improve fuel efficiency by several miles per gallon in 2017 model-year vehicles, and then make smaller additional improvements every year until 2025. The biggest trucks, such as some of Ford’s F-Series pickups, won’t face an increase until 2020. After that, they would need to make improvements every year through 2025. The bigger the truck, the more time will be allowed for auto makers to improve miles-per-gallon figures.

Because the proposal is still being negotiated, that’s as detailed as we can get for now, but it’s clear why the Hondas and Hyundais of the world aren’t happy with these broad strokes. More to the point, because every MPG of improvement in vehicles with the worst fuel economy save more fuel than the same improvement in a more-efficient car, the Asian brands have a point when they argue that this approach is counter-productive. After all, the Obama Administration’s stated goal is “saving families money and reducing dependence on oil.” So why go easy on the light trucks, which have the highest consumption levels?

Federal regulators are looking to give more leeway to larger trucks because they feel those vehicles required greater improvements than their smaller counterparts in the last round of changes to fuel-economy regulations, two people familiar with the administration’s thinking said.

The debate is still wildly ambiguous, based as it is on complex formulas that have yet to be publicized. But with automakers and regulators meeting daily now to push out a new standard, we should have a better sense of the direction things are going in the coming days and weeks. But because the government still partially owns GM and Chrysler, expect a strange coalition of environmental groups, foreign-based automakers and anti-bailout Republicans to push hard against any perceived attempt to favor Detroit in the new regulations. After all, trucks and SUVs, not to mention Detroit’s historic dependence on them, are highly-charged symbols of inefficiency and uncompetitiveness. Stacking the deck to keep trucks cheap and thirsty, if indeed that’s what this proposal does, will not be looked kindly upon by history.

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33 Comments on “Asian Brands Complain That New CAFE Rules Favors Trucks, Detroit...”


  • avatar
    ajla

    …will motivate consumers to buy less-efficient offerings, and in turn give the Detroit manufacturers an unfair advantage.

    So the Japanese and Korean manufacturers are saying that they can’t compete with Detroit sales in the large truck and SUV segment? It’s not like the Armada, Pathfinder, Titan, Sequoia, Tundra, 4Runner V8, and Borrego never existed. I’m not seeing where “unfair” comes in.

    ______________
    Is this really any different than if Detroit complained regulations will push people toward more efficient cars, which would give foreign manufacturers an unfair advantage?

    • 0 avatar
      Brian E

      Yes, it is different. The stated purpose of the regulation is to improve overall fuel efficiency of the vehicles on the road. Thus it’s not doing its job if it is encouraging sales of larger, less fuel-efficient vehicles.

  • avatar
    tced2

    Wolf in charge of the hen house.
    The writer of the rules (EPA/White House) is stockholder in companies that make light trucks – which are more profitable. Oh it doesn’t hurt that their buddies (UAW) are also stockholders in the same companies.
    Now if we could just get the federal government to be a large shareholder in oil companies….

  • avatar
    ClutchCarGo

    There’s not nearly enough info available yet to make claims of bad faith. Consider these stmts:

    “The biggest trucks, such as some of Ford’s F-Series pickups, won’t face an increase until 2020. After that, they would need to make improvements every year through 2025. The bigger the truck, the more time will be allowed for auto makers to improve miles-per-gallon figures.”

    “So why go easy on the light trucks, which have the highest consumption levels?”

    If delayed stds apply to large trucks (a small part of the market) while light trucks are on a similar schedule to cars, this makes good sense. Higher stds on the most popular vehicles (by sales) will net the greatest fuel savings due to the greater numbers on the road, even if large trucks could show greater improvement per unit. It’s only if the line between light and heavy vehicles is drawn too low that new stds will fail to help, and that line is still unknown.

    • 0 avatar
      SunnyvaleCA

      But Ford’s F-Series is *BY FAR* the most popular vehicle in the United States. See http://www.thetruthaboutcars.com/2011/07/the-25-best-selling-vehicles-in-the-first-half-of-2011/

      It’s not clear if the new CAFE will immediately affect the smaller versions of the F-150 or if only the most humungous and guzzling ones will get a 9 year free pass. If the smaller ones are affected, that could still lead to a bad scenario: Ford might just redesign those smaller versions to be bigger so that they qualify for a free pass. That has happened in the past and I don’t see why it wouldn’t happen again (assuming fuel prices remain low).

      • 0 avatar
        Mark45

        How do you get a 9 year free pass? It says the the CRV would need an improvement in 2017 an d the trucks in 2020. That’s only 3 years.

      • 0 avatar
        SunnyvaleCA

        Mark, “some of Ford’s F-Series pickups, won’t face an increase until 2020″ means no changes in CAFE for those vehicles until 2020, which is 9 years away. Thus 9 years of no needed changes, which, in my mind, is a “free pass.”

      • 0 avatar
        Mark45

        If you look at it like that since none of these regulations go into effect until 2017, all the vehicles are getting a 7 year free pass.

      • 0 avatar
        ClutchCarGo

        “It’s not clear if the new CAFE will immediately affect the smaller versions of the F-150 or if only the most humungous and guzzling ones will get a 9 year free pass”

        And that’s my point: getting agitated about different timeframes is pointless until more is known about where the line is drawn. The quote from WSJ refers to SOME of Ford’s F-series getting a longer timeline.

    • 0 avatar
      mazder3

      Oh, “standards”! Sorry, my mind was in the gutter….:)

  • avatar

    If light trucks were subjected to mileage increases earlier (by which I mean, as early as all other vehicles) it would encourage automakers to take commonsense approaches earlier, and most should already have been in place: Making half-ton trucks lighter and smaller, using diesel engines, and making more (and better) compact trucks for people that like trucks but don’t need F-150s to do simple basic things like go fishing or haul a few gypboard sheets home from Lowe’s.

    Instead, it appears the government may let these trucks get a pass. If it does so, the government will be guilty of once again babying the major American automakers by allowing them to skimp innovation in pretty much the only arena they still own, keeping full-size trucks cheap and plentiful and therefore desirable even to some that don’t need them; and, even worse, making other segments like compact trucks impossible to sell. I see no reason why automakers can’t begin to make fuel-economy improvements in full size trucks at the same time they put improvements across their vehicle lineup.

    Americans don’t use half-tons the way the rest of the world uses their (compact, four-cylinder diesel!) trucks. We use them as recreational vehicles and passenger cars, chugging gas at 15 miles to the gallon, and this legislation refuses to acknowledge that fact. It continues to assume that these trucks are being used as they were designed to be used, which is often untrue. Even many of the contractors and designers I know use their “work trucks” as commuter vehicles on the side. And even with gas prices as high as $4.00 a gallon and higher, I knew many a man that refused to give up his pickup no matter how high it goes. And God forbid an amateur Home Depot handyman put his 4×8 plywood in the back of a Ranger or Ranchero…

    Bottom line, making small cars bump up their fuel economy sooner will also drive their prices up compared to trucks, making full size trucks appear less expensive in the process. It will reduce significant innovation to trucks and will negate practical drivetrain and engine changes to full size trucks that should already be in place, such as replacing V8 gasoline motors with diesels. And, worst of all, it will make full size trucks a desirable alternative for consumers.

    If you really, truly want a fullsize truck but don’t need one, you should have to pay the piper for it. The government should not give automakers and consumers an incentive to manufacture or buy an F-150 when they could do just fine with Fiestas.

    • 0 avatar
      moedaman

      You do “pay the piper” when buying a truck. You pay much higher fuel costs. If you can’t afford those costs, then you either A) don’t buy a truck or B) sell off your truck if you have one.

  • avatar
    segfault

    There should be one MPG standard for the entire fleet, regardless of whether it’s a car, CUV, or truck. Problem solved!

    • 0 avatar
      rpn453

      I agree, and that standard should be 10 mpg so the consumer can decide for himself where he wants to spend his money!

    • 0 avatar
      stuki

      First, the MPG tests themselves would have to make more sense. Silly over gearing and 1-4 shift interlocks, Corvette style, demonstrates just how nonsensical the whole sham is.

      While it’s OK to have a test for how little fuel a car can use while hypermiling, any practically meaningful test would also include a measure of how much fuel it uses driven flat out. One of the most fuel saving features of weak engined cars, is simply that they force people to drive them in a fuel saving manner. Noone buys a Z06 to pussy around like some hypermiling Prius driver, and any test that does not account for the Z06′s burn on full stonk, won’t capture it’s realistic impact.

  • avatar
    golden2husky

    I actually can see the need for a separate standard for a pickup truck. A pickup needs to be able to haul loads, tow, etc. These requirements require beef to the structure, and that means weight. However, as these proposed regs are shaping up, it is nothing but a hand out for the pickup makers, and as written, there will be no improvement in efficiency. In fact, it may make certain cases worse. But seeing that many trucks are used for hauling nothing but the contractor’s wife, perhaps only strippo work trucks should get the reduced requirements. Or maybe the truck market should shadow the car standards, just a few mpg less. Anything would be better than what is proposed.

  • avatar
    Robbie

    How terrible a company must you have, if you can manage to go bankrupt in spite of all this type of protectionism from Washington…

  • avatar
    Philosophil

    Does the ‘truck’ qualification apply to large SUVs like the Suburban, Sequoia, Escalade, Lexus LX and so on? If so, then that might make this multi-tiered approach even more problematic.

    • 0 avatar
      stuki

      Like all things in contemporary, progressive America, that depends on whether they are currently sufficiently fashionable to warrant sufficient lobbying and campaign contribution promises.

  • avatar
    NulloModo

    I’m not one to generally put too much faith in the magical forces of ‘the market’ but in this case it might make more sense than CAFE. As gas prices go up people are naturally moving to more efficient vehicles.

    Crossovers are replacing BOF true SUVs, mostly due to fuel economy. Compact cars are becoming more and more popular, and subcompacts are becoming an actual viable part of the market. The F-150 still sells incredibly well, but over 50% of buyers are opting for the more fuel efficient V6 offerings.

    Everyone has a ‘make it or break it’ figure when it comes to fuel economy. I don’t know of legislating US buyers up that scale faster than they are ready is the answer. It seems that people are moving themselves up the efficiency ladder pretty well on their own given the cost of gas.

  • avatar
    HoldenSSVSE

    Don’t minivans fall into the “light truck” category too (e.g. Town & County, Sienna, Odyssey, Mazda5).

    • 0 avatar
      ciddyguy

      No I don’t think so as they are typically uni-body FWD vehicles that are more car than anything else by their construction.

      I think they had to follow many of the safety standards along much the same time lines as passenger cars with some exceptions and I think they also followed passenger car mileage standards even though they were a van and got about as much as many cars of the day did and this is still largely the case today with the newest iterations.

      • 0 avatar
        HoldenSSVSE

        I found this, and it appears that minivans do fall in the light truck MPG standards with the EPA.

        http://www.intellichoice.com/carBuying101/TruckvsFuel

    • 0 avatar
      Richard Chen

      IIRC the Subaru Outback also qualifies as a “light truck”.

      So, what’s the Miata’s new fuel economy target with the footprint rules, 70mpg? Or for that matter, the Corvette?

  • avatar
    beefmalone

    Here’s a crazy idea…let the public decide what they want to drive instead of cramming another plasto-econo-crapo shitbox down our throats. CAFE is just another big government holdover that is no longer relevant. When gas hits $5 and $6 a gallon then the consumer will start promoting economy with their wallet.

    • 0 avatar
      John Horner

      Agreed. Lets let gas taxes do the job. How about setting gas taxes high enough to cover all the costs of the military involvement in the middle east. Then we can scrap CAFE.

      • 0 avatar
        stuki

        We can scrap CAFE regardless, as it’s nothing but a forum where scumbags get to convince idiots to tilt the competitive playing field in their favor; but I’d be all for scraping the income tax along with it, and fund the military solely with gas taxes. Then people would have much more information readily available about the cost of our military involvement everywhere, and could vote accordingly. Personally, I’d still be in favor of no gas taxes.

  • avatar
    DenverMike

    You can downsize a Camry and nudge people towards EVs and hybrids but the bigger a truck is the more likely it exists to perform a specific task that can’t be performed in a Tacoma. Chances are you want a fully equipped ambulance and fire/rescue when you dial 911. Remove the power and heft from an F-250 and I’ll be forced into a 1 ton. As long as the size of the task/trailer remain the same, it’s kinda pointless to rearrange work trucks.

    • 0 avatar
      LectroByte

      Folks buying trucks because they ACTUALLY NEED THE CAPABILITIES IT HAS? I’m ok with that. Around here, there are a lot of F250′s that don’t do anything more strenuous than taking one person to work and back every day.

    • 0 avatar
      stuki

      Chances are also, that if being picked up in an ambulance is so darned important to you that others’ health and livelihood be damned (I don’t necessarily buy into that; but absent that, no form of CAFE make any kind of sense), having one around is important enough to you that paying for the inconvenience and suffering it imposes on third parties is worth your while. And if it’s not, you can always elect to simply lay there and bleed out. It’s hardly skin of anyone else’s bone.

      The whole notion that “my reason to do X(supposedly bad thing), is more important that yours, so I should be allowed to but not you, is one of the worst features of contemporary America.” Neither Gaia, nor anyone’s lungs, gives a hoot what the reason someone dumped pollutants into the air was. One gram of CO2 is one gram of CO2, and noones grams are more equal than others.

  • avatar
    Steven02

    Honestly, I think this is whining without much reason for that.

    For the Asian vehicles that qualify, they are going to be held to the same standard.

    For the American models that don’t qualify, they have to be ready for the earlier dates as well.

    I see it this way. The standard (judging from what I have read) will have mpg requirements based on size. You know, like how many vehicles today, mpg varies based on the size of the vehicle.

    Bigger vehicles will be harder to make meet the new standards. Not a shock there. But, it will have to be done. Also, companies are going to price the vehicles according to size like it done today. I don’t expect an F150 to cost less than a Fusion, Focus, Flex, or Explorer.

    Also, while trucks like the F150 are big sellers, far more people are choosing crossovers today. They get better mileage, drive better, and meet people’s needs better. I don’t have the numbers in front of me, but I am betting that crossovers are selling in higher total numbers than BOF trucks right now. Think about all of the Lamdas, Highlanders, Pilots, etc that you see on the road. There are a ton of them. More than trucks… and I live in Texas.

    Depending on what gas prices do in the future, which is likely to go up and go up a large amount, the more fuel efficient vehicles are going to sell much better. The complaints here are pretty dumb.

    Also, this is a 3 year difference. Not even an entire model lifetime. Most are on 5 to 6 years plans. If the Asian makers, especially Toyota, are smart, they would have their vehicles ready to go ahead of time. It would look better if the Tundra would be getting really good gas mileage numbers while the Silverado and F150 were only ok numbers.

  • avatar
    Ion

    Toyota (the brand) has more trucks and SUV’s than any of the ‘domestics’. If any make is favored by the lax CAFE standards it’s them.


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