Gas pump
While much of the auto industry is focused on the 2011 Los Angeles Auto Show, a handful of folks are looking in the opposite direction, toward Washington, D.C. There, the Environmental Protection Agency and the Department of Transportation are expected to announce new fuel economy regulations that will affect vehicles manufactured in 2025 and later.
Regular readers may already be familiar with these new efficiency guidelines -- after all, they've been a topic of discussion since July, when President Obama announced an agreement that his team had brokered with 13 automakers, the State of California, and the United Auto Workers union.
The gist of that deal was that automakers will have to achieve a fleet-wide average of 54.5 miles per gallon for vehicles sold in the U.S. The specific thresholds are 44 mpg for light trucks, vans, and SUVs, and 62 mpg for cars. Today's announcement is expected to formalize the regulations that Obama set out and to establish a timetable for their implementation.
Earlier today, we covered this story on our sister site, The Car Connection, but there are special areas of interest and concern for green car fans. We imagine that many of you will view the increase in fuel standards as a good thing, but there are a few caveats to consider:
1. By setting a strict timeline on fuel efficiency, the federal government will influence which technologies win out. Fourteen years may feel like ample time to develop new, fuel-efficient powertrains, but given the lead time required for product development and the cashflow that automakers need to meet their bottom lines, 2025 is much closer than it seems. Car companies will almost certainly bet on today's tried-and-true tech rather than outside-the-box possibilities.
2. As a result, electric cars and extended-range hybrids are likely to fare the best from the EPA's new regulations. Though their sales may be sluggish, examples of both powertrains currently roam the roads -- and they work. (Diesel may come out okay, too: we'll see.) Fuel cells should continue shuffling forward, but they'll almost certainly remain on the fringe. Fourteen years probably isn't enough time to generate the interest or infrastructure to make fuel-cell vehicles a significant part of any automaker's fleet.
3. Green cars should become more competitive in price, and that's particularly true for electric vehicles. Thanks to economies of scale -- and perhaps the development of a viable solid-state battery -- the price difference between hybrids, electric cars, and conventional vehicles will become, if not negligible, far less noticeable.
4. However, cars will become more expensive on the whole. As we mentioned earlier today, the costs of developing fuel-efficient tech and of implementing the new EPA regulations will almost certainly fall on the consumer. That should result in vehicles that are $2,500 - $7,500 more expensive than they are today -- and that's on top of price increases from inflation.
In a nutshell, there are at least two ways of looking at the fed's new regulations. Optimists will say that the guidelines will force automakers to produce more fuel-efficient cars and that consumers will save cash at the pump (up to $8,000 per vehicle, according to some estimates).
On the other hand, pessimists will argue that imposing such a harsh deadline essentially stifles innovation. Automakers will go with what they know in order to be effective instead of exploring new possibilities for fuel efficiency. Half-empty types might also complain that without a boost in the gas tax, people aren't likely to shell out for the pricier new vehicles, even if they are super efficient (and even if fuel efficiency remains a top priority for new car shoppers).
But we're curious about where you sit on the matter. Feel share your thoughts in the comments below.
