New Fuel Rules Favor Detroit Automakers

Includes: F, GM, TM
by: Michael Steinberg
The Wall Street Journal “Today's Gas-Guzzling Exotic Cars May Get Zapped by New Fuel Rules” focuses on the problems specialty cars will have meeting the proposed CAFÉ rules. The new fuel economy standards will be based on a vehicle’s footprint. Specialty, high powered luxury and sports cars cannot meet the compact and midsize footprint mileage requirements. They will have to either redefine luxury and sport, or pay fines.

Separate standards will be set for cars and light trucks for each footprint size. For example, a 45 square foot small car footprint would be required to average between 35 and 40 MPG. However, the same size small truck would have to average less than 35 MPG. As the footprint increases, the mileage requirement drops. This way the average new American fleet will achieve 35 MPG, without eliminating large vehicles.

The Journal gives a few examples of the overall 2015 mileage requirement by company: Porsche 41.3, BMW 37.7, Toyota (NYSE:TM) 34.6, and General Motors (NYSE:GM) 34.7.

The new standards heavily favor Detroit and foreign full line manufacturers by allowing large cars and SUVs to continue, but everyone will still have to adjust their definitions of performance and luxury. Performance has been a horsepower race with little regard to a vehicle’s weight. Luxury has been a gadget race, again with little regard for adding weight to a vehicle.

In the new world, mileage is fixed by vehicle size and by definition so is horsepower. So the only way to increase performance is to reduce weight. Thus horsepower per pound (HP/lb) will become the key performance metric. Since lighter materials cost more, higher priced cars will sport better performance. On the luxury end, each power feature added will require weight be removed from somewhere else. Lower priced cars might actually have to remove features to achieve a reasonable weight.

The new emphasis on HP/lb will spur an avalanche of new technology in material science and engine efficiency. This will be a great transition into the weights needed for all electric vehicles. While not ecologically perfect, I believe the new standards provide the right motivations for the auto industry.

No Disclosures.

About this article:

Tagged: , Auto Manufacturers - Major
Want to share your opinion on this article? Add a comment.
Disagree with this article? .
To report a factual error in this article, click here