Photo: Travis Okulski / Business Insider
The headline Tuesday was that the White House had formally issued the country’s highest-ever corporate average fuel economy standards at 54.5 MPG.The standards were actually agreed to by 13 automakers last year.
But talking to industry insiders, resistance to the new standards remains strong.
Of that 13, three companies represented by the Alliance of Automobile Manufacturers held out: Mercedes, Porsche and Volkswagen.
That’s because luxury carmakers, among others, don’t produce the light trucks that are exempt from the new standards.
In its statement on the finalization, the industry said it was pleased to have clarity on a uniform economy standard after years of overlapping regulations.
But the group added that demand, not concepts, would ultimately dictate compliance.
“After years of billion-dollar investments by automakers, consumers have a lot of choice in fuel-efficient cars and light trucks, and automakers are working to sell these high-mileage vehicles in high volumes. Compliance with higher fuel-economy standards is based on sales, not what we put on showroom floors,” it said.
Alliance spokesman Wade Newton told us any new technologies developed by manufacturers will almost certainly raise the sticker price of new vehicles. — but that it would almost certainly raise upfront costs.
“It’s a tough hill to climb for every automaker,” he said.
Producers are going to have to rely on consumers to make a back-of-the-envelope calculation showing the new standards work out in their favour, he said.
GasBuddy.com senior analyst Gregg Laskoski believes the government is overreaching.
“Why should we as taxpayers be subsidizing (via federal tax credits & incentives) a specific vehicle one consumer buys and not another?” he asked in an email. ” Such policies create absurdities that are indefensible.”
Bruce Belzowski, an assistant research scientist at the University of Michigan’s Transportation Research Institute, believes those concerns are overblown.
“Manufacturers should do OK,” he said. “They will come up with new technology and pass the cost onto consumers, who get more fuel efficient vehicles and save more on long run.”