Szakaly: CAFE Targets Will Curb US Auto Sales Beyond 2018
The federal fuel efficiency mandates now in place to guide automakers toward a fleet average of 54.5 mpg by 2025 may curb United States auto sales after 2018, according to a leading economist speaking during the 2014 Management Briefing Seminars in Traverse City, Mich.
Automotive News reports National Automobile Dealers Association chief economist Steven Szakaly warned that the challenges associated with the new CAFE targets were severely underestimated by the industry in comparison to previous CAFE targets.
He says that while automakers are currently experiencing a resurgence in sales with “good profits” on large vehicles, such as pickups and SUVs, future sales past 2018 will pale in comparison — with little hope for avoiding those losses — as automakers focus more upon the 2025 CAFE target:
Unless gasoline prices rise significantly, or we see consumers becoming irrational and everyone buying an electric car, it’s tough to think of consumers willing to pay $3,000 to $7,000 more for the exact same car, just because someone in Washington, D.C., or California says they need to buy it.
They may WANT to charge more, but I'm betting they won't - because they know they'll lose sales to whoever is willing to sell for less. The companies that lose overall in this sort of game are small ones like Mazda, and more niche providers like Volvo.
So, the head of the dealer's association thinks they know more than the automakers do? This would be the same dealer's association that does consumer-friendly things like "protect" us from direct sales? The same one that fights tooth and nail against any law that might make dealers less shady? Those guys? Yeah, totally trustworthy. I trust the engineers at the automakers, which seemed pretty cool with the latest CAFE targets.
I don't feel the doom and gloom. Cars today are oversized and overpowered. A car with today's technology but with '90s era size and performance will easily surpass whatever CAFE standards might exist. Just reigning in some of the idiocy that is light trucks will accomplish much of it anyway, and that is finally starting to happen. And they will sell just fine. Personally, I think café is stupid and a realistic gas tax would be a far better way to accomplish the same goal, but reality is reality.
Fuel cells should be encouraged by the enthusiast community. They would also be great for sports cars and muscle cars (wait for it...) because range extension with a ~17kg fuel cell could nearly double the highway fuel economy, while still maintaining the engine/transmission of choice for acceleration and ‘track’ purposes. Can’t wait until they can also run off the same fuel as is already in the ICE vehicle’s fuel tank. Petrol/diesel/gas fuel cells exist, and they are coming down in weight and cost. The DOE estimates that mass-produced fuel cells should cost $30/kW. A small auxiliary /modular fuel cell for highway use should eventually be cheaper (as a CAFE-centric solution) than continuous downsizing and boost increases. Having a small Solid Oxide Fuel Cell for highway cruising would allow the ICE to have reduced complexity (would not necessary for future BMW ///M cars to downsize to a 1.0L quad-turbo to get outstanding highway fuel economy).