We won’t get into the politics of emission-control laws here, except to observe that you’re either a Marx-quoting, global-warming-duped, vegan one-worlder who wants to crush personal initiative beneath tons of bureaucracy and force everyone to ride an electric bus to their groat rations at the communal kitchen… or you’re an Ayn-quoting, gun-fondling, toxic-waste-spreading wingnut who cackles with glee at the mental image of inner-city children shriveling like salt-soaked slugs beneath tons of lead, oxides of nitrogen, and unburned hydrocarbons. Now that you’ve all chosen sides, imagine that every official in every level of every government in the world waved their magic legislative pens and put the kibosh on all emissions-related regulations concerning motor vehicles. Would you go clean, dirty, or in-between with your next vehicle purchase? (Read More…)
Canada’s government is seen as reluctant to tackle the issue of climate change. Concerned Canadians have even taken to discussing how putting a Canadian flag on one’s backpack may be dangerous because our lack of environmental leadership has diminished our standing in places like Europe. Or at least that’s what one eco-conscious party guest told me, in between agitating for more bike lanes and asking for a lift home.
Since motorists and drivers are low-hanging fruit without any kind of organized lobby, our Conservative government has decided to offer up the automobile as a sacrificial lamb in the PR temple by implementing CAFE-style standards on Canadian vehicles. As we all know, CAFE is a deeply flawed system that rewards the bad guys. So why would Canada, a land of small cars and high gas prices, do this?
Automakers looking for a bit of a break with CAFE compliance can now get a 2 for 1 special on EVs.
Close your eyes and imagine it’s 1979. A first-term Democratic president struggles with unemployment, malaise, high energy prices, and embassy trouble. The landscape of today looks like the landscape of then, but there’s one important thing missing: The compact pickup. Where did they go? The small pickup was an indelible symbol of America’s lowered expectations in the Seventies and Eighties. Now that crappy times are here again, where are the paper-thin truck beds and wheezy-but-indestructible four-cylinders to pull them?
Over the last few days we’ve been discussing the implications of the growing gap between global oil demand and production, looking at the responses of a global automaker, a radical startup and the oil industry itself. And make no mistake, it’s an uncertain future out there… unless you’re selling cars in the US. In that case, your future just arrived, planned all the way through 2025. That is, if you think this proposed rule will survive four presidential elections and one industry-government “mid-term review.” Want to familiarize yourself with this pre-planned fuel economy future? All 893 pages await your perusal, in PDF format here. Or, hit the jump for a few broad strokes.
Remember the uproar over Unintended Acceleration in Toyotas? After more than a year of investigation, NHTSA has yet to find a definitive cause for the furor… although the experience was not an entire waste. In fact, the most interesting result of the entire situation was that it cast light on NHTSA’s inefficacy as much as it did embarrass Toyota’s quality control. And to help clarify what exactly the lessons of the Toyota flap were, the DOT’s Inspector General has released a report detailing its criticisms of the federal safety regulators. According to the report [PDF], NHTSA’s Office of Defect Investigation (ODI) has not
- Adequately tracked or documented pre-investigation activities.
- Established a systematic process for determining when to involve third-party or Vehicle Research and Test Center (VRTC) assistance
- Followed timeliness goals for completing investigations or fully implemented its redaction policy to ensure consumers’ privacy. [Ed: gee, you think?]
- Established a complete and transparent record system with documented support for decisions that significantly affect its investigations.
- Developed a formal training program to ensure staff has the necessary skills and expertise.
Chinese automakers are delaying exports to Europe and the US until after 2015, largely because they admit their products aren’t “ready for primetime.” And few issues demonstrate that fact as well as the scandalous crash test videos that have defined internet perceptions of Chinese cars for years now. But with even more recent Chinese export-intenders continuing to put up lousy safety results, Autobild reports that, starting in 2012, China will improve its crash test standards to near-European levels.
NHTSA has denied the niche supercar maker Pagani a waiver for advanced airbag requirements for its new Huayra, possibly forcing the Italian firm to delay US sales until 2015. According to the Federal Register[PDF], Pagani
estimated that if the requested exemption were granted, it would sell 35 to 45 vehicles per year, 6 to 12 vehicles of which would be sold in the United States…. [Pagani] submitted projections estimating that if the petition for exemption is denied and no vehicles are sold in the United States, the company would make an estimated €5,398,000 in net income during the period of 2011 through 2014, compared to €8,613,000 in net income during the same period if an exemption were granted. The company asserted that the difference in gross revenue between granting and denying the exemption is approximately €34,000,000, and the financial records indicate a difference in projected net income of approximately €3,215,000.
The announcement of President Obama’s proposed 54.5 MPG 2025 CAFE standard was hailed nearly unanimously today in a ceremony attended by many auto industry executives as well as government officials. Volkswagen and Daimler were conspicuous by their absence, as the Bloomberg quotes VeeDub spokesman Tony Cervone arguing
The proposal encourages manufacturers and customers to shift toward larger, less-efficient vehicles, defeating the goal of reduced greenhouse-gas emissions,
while Reuters notes Daimler’s response
Mercedes-Benz, the luxury car line owned by German car and truck maker Daimler, did not back the new program, saying it “clearly favors large SUVs and pickup trucks.”
“Our customers expect a range of vehicles from which to choose so this program creates a very real disconnect between government regulation and customer demand,” the carmaker said in a statement.
But are these concerns well-grounded? We don’t know yet, as the details of the proposal (specifically the loophole details) have not yet been released. Instead of publicizing the full rule, the White House released a report [PDF], highlighting the easy-to-like aspects of the proposed rule. But how easy-to-like is the standard really?
After the apocalyptic warning from the industry about a proposed 56.2 MPG 2025 CAFE standard, the auto industry seems to be backing the White House’s latest proposal, which reduces the 2025 target to 54.5 MPG, slows the rate of efficiency improvement for trucks and increases advanced technology credit loopholes. Another key consideration: the White House agreed to a mid-term review of the 2025 standards to ensure they reflect the market. Plus, the DetN points to a previously unheard-of compromise to keep big trucks cheap:
The plan is also carving out special rules for “work trucks” — heavier light duty vehicles used for construction.
As a result of these compromises, the WSJ [sub] reports:
As of Wednesday, Toyota Motor Corp., General Motors Co., Ford Motor Co., Chrysler Group LLC, Honda Motor Co., Hyundai Motor Co., Nissan Motor Co., BMW AG and Volvo had told the administration they would support the plan
With the industry now largely on board, the Obama Administration has a green light to announce its new standard at a ceremony planned for tomorrow. But not everyone is happy with the new proposal…
Over a month ago now, I was told by several people who should know that the 2025 CAFE standard “number” would fall between 60 MPG and 50 MPG. When I pressed for details, the only answer I got was “at or slightly under 55 MPG.” So when the Obama Administration opened the haggling at 56.2 MPG, I wasn’t sure if he would stand fast by that number or come down a little. Certainly the auto industry and its allies have been portraying the 56.2 MPG proposal in apocalyptic terms, running attack ads against it like this one hosted at the Freep [MP3]. And apparently the opposition paid off, as the WSJ [sub] reports that the Obama Administration has caved, reducing its proposal from 56.2 MPG to 54.5 MPG… and that’s not all. According to the report
The plan calls for a 5% average annual increase in fuel economy for cars and a 3.5% increase for light trucks through 2021. After 2021, both cars and trucks face a 5% annual increase… Included in the plan are credits for hybrid vehicles—including large trucks —and measures that will give big pickup trucks and sport-utility vehicles more leeway in meeting the target.
We’ll have to wait to see the proposal in detail before we know for sure what happened here, but it seems that the industry has largely gotten what it asked for. Not only is the overall number decreased, but truck compliance has been slowed and “advanced technology credit” loopholes appear to have been expanded. This is fantastic news if you sell a lot of trucks and SUVs, and not so fantastic if you care a lot about dramatically reducing fuel consumption over the next 10 to 15 years. But again, we’ll just have to see what specific proposals are included in the new deal, and how automakers react before we jump to too many conclusions.
With CAFE negotiations heating up, safety regulation coming down the pipe and the UAW pushing for another round of “retooling” loans, GM is upping its profile in the nation’s capitol with a new ad campaign aimed at policymakers. The DetN reports
A Washington-based spokesman for the automaker, Greg Martin, said the effort is to make sure policy makers “are aware of GM’s contribution to our nation’s economic and competitive strength.”
GM has a broader story than just profits and sales, he said.
“GM has started an ad campaign in select Washington publications because there’s more to GM’s resurgence than just increased sales and profitability,” Martin said. “GM is also an auto company investing heavily in America’s future, creating new jobs and inventing solutions and technologies that will make a real difference in energy and safety.”
But the waves of coming auto-related regulations may not actually have motivated the ad so much as the fact that the government is likely to sell off its remaining 26% share in GM by the end of the year (if not by the end of the Summer), and they’re facing an $11b loss at current stock prices. By emphasizing that the auto bailout created a positive corporate citizen rather than just a newly-profitable company, GM likely hopes to convince the government that the political downsides of taking a big loss on The General was ultimately worth it. And that’s an important PR step in the short term as well, as CAFE negotiations are giving rise to bailout-tinged rhetorical attacks on the automaker. For example, Ralph Nader tells the Freep
We give GM billions of dollars, and what do taxpayers get in return? Opposition to a policy that will clearly save them money and give them better cars,
Dare to suggest that a strong CAFE standard won’t ruin any automaker, and you’ll be overwhelmed by deafening cries of “what about the market,” “think of consumer choice,” and “don’t you tell me what to drive.” Now, I’ve made it very clear that I’m not a huge CAFE fan, but the fact of the matter is that since nobody is leading a charge for a gas tax (least of all the industry that says it would be a good thing) it’s the only option on the table. Which leaves just one question: why regulate fuel economy at all? There are all kinds of arguments against regulating fuel economy, but most stem from a desire to “let the market do its thing.” That’s an argument I’m highly sympathetic towards, but it doesn’t necessarily require that the government but out and let the era of cheap, thirsty trucks roll on unabated. What maybe, just maybe, if the market actually wants more fuel economy? Well guess what campers… according to research by IHS Global Insight [via Automotive News [sub], the market does want more fuel economy.
An anonymous tipster has sent us a copy of a letter from the Michigan congressional delegation to President Obama [PDF here, or hit the jump for an embedded copy], which calls his proposal for a 56.2 MPG CAFE standard by 2025 “overly aggressive and not reasonably feasible.” The letter is remarkable in the sense that the major signatories are Democrats, and yet it attacks the President’s proposal with more vigor than many inside the industry. The letter also confirms that that the Detroit-based automakers already rely on CAFE’s “credit” loopholes in order to meet the 2012-2016 standard, a stunning admission of how far behind Detroit still lags in fleet fuel economy. And rather than taking responsibility for their situation, the MI representatives blame CAFE for Detroit’s low fleet efficiency, arguing that “manufacturers that produce primarily smaller vehicles will have an unfair advantage.” Moreover, the MI reps don’t just admit that Detroit is behind its competition, but even goes as far as to argue that “the overall targets currently proposed may exceed what is technologically achievable for the the US automakers that produce and sell the majority of the larger pickup trucks and sport utility vehicles that US families and businesses -and tens of thousands of autoworkers- depend on.”
In short, the letter strikes me as a shockingly old-school display of excuses and apologia that stands in sharp contrast to the “green car revival” narrative that Detroit and D.C. pushed so hard during the bailout. And frankly, I’d be embarrassed if I ran one of the largest automakers in the world and I was reduced to pleading my inability, on technological grounds no less, to achieve a 56.2 MPG fleet average (which in “window sticker” terms, translates to about 41 MPG EPA) within 15 years… even though CAFE is riddled with loopholes that make it easier to continue building thirsty trucks. If Detroit were actually leading the charge for a gas tax (or offering any kind of market-driven alternative), it might have some credibility on this issue, but as things stand this strikes me as nothing more than whining. So much for America’s “can-do” spirit…