Why Did Car Companies Cave on CAFE?

Car companies have been complaining about fuel economy standards ever since they began back in the 1970s.  All through the 80s, 90s and Zips they’ve managed to block increases in the standards, by spreading Fear, Uncertainty and Doubt about their effect on safety (small cars will kill you!), on competitiveness (the Japanese will eat all the jobs in Michigan!)  and desirability (big Americans like big cars!).

Yet last year they rather meekly submitted to new standards that will cut fuel consumption by 40% by 2026.   The standard for medium cars will rise from an EPA window sticker mileage of 21 mpg to 34.  Why did their attitudes change?

There are a couple of obvious reasons:

  • The US had just bailed out GM and Chrysler to the tune of tens of billions, and at major political risk to the Obama administration.   Complaining about new rules would seem … ungrateful.
  • The Prius showed that high mileage was feasible and popular in a reasonably-sized car.
  • Gasoline really is getting expensive.  At $3/gallon, a 21 -> 34 mpg change saves $5500 over 100K miles, and saves $7200 at the current $4/gallon.   As a direct consequence, people really are buying more efficient cars.

Yet I wonder if there’s a more interesting reason – the car companies want that $7200 for themselves.   If they can  charge you $3000 more for a car that gets enough better mileage to save $7200, they win and you win.  And air quality wins, and CO2 emissions, and US energy security.  That extra money could go to better technology and good work for American engineers and workers, or it could go to Venezuelan oil companies, or Saudis, or Iranians, or worst of all, Canadians.

So now everyone is thinking seriously about mileage, and unsurprisingly it’s getting better everywhere.  It turns out that there are lots of ways to improve the efficiency of standard engines, like optimizing valve timing and fuel ignition.  ArsTechnica is running a good series on this: “More bang, less buck: How car engine tech does more with less”.    There are now a number of non-hybrids at 40 mpg: the Ford Focus, the Chevrolet Sonic, and the VW TDI Passat.   The hybrid advantage is shrinking!  Mazda has actually sworn off them, and will get all its gains from improving the standard system.  The 34 mpg standard will not be all that hard to meet.

That alone is not enough.  The climate scientists say that we have to get CO2 emissions down by 80% by 2050 to avoid catastrophic warming.  That would correspond to 105 mpg.  And even that is achievable!  The EPA now has a mileage standard for all-electric and plug-in hybrids: MPGe.  It assumes that one gallon of gasoline corresponds to ~34 kWH of electrical energy, which is the actual chemical energy content of gas.   A lot of the electrics are already there, and the Ford CMAX Energi plug-in is now there too.  Actual US gasoline consumption is down about 7% from its peak in 2006 according to the EIA.  Cars won’t be what kills us.

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