Frozen Fuel Economy Standards Could Lead to Less Automotive Innovation

The Trump administration is following through with promises to cut back on vehicle fuel efficiency standards installed under the Obama administration, known as CAFE. The CAFE standards mean that by 2025 fuel efficiency for an automaker’s fleet will need to average 50 mpg. While ditching CAFE has excited a fair amount of performance enthusiasts, the fact is they and everyone else should be concerned about what could and likely will follow.

It might seem like pushing for fuel efficiency is making cars no fun, but the exact opposite is true. Many enthusiasts still blame the push for fuel efficiency and lower emissions for ruining the golden years of American muscle cars in the early 1970s. What they might not realize is with modern technology the game is different today.

Automakers Won’t Do It Themselves

Some people argue that we don’t need government to step in and set up “artificial” fuel economy standards.

I don’t subscribe to the philosophy that automakers are inherently evil or have some secret alliance, unlike some paranoid groups. But, I also don’t believe automakers will voluntarily make their vehicles more efficient, even if they perceive that’s what people want. It’s like arguing that cars will become cheaper because people want to pay less for them. The government needs to mandate improved efficiencies because the market won’t drive them alone. A perfect example: during the 1990s when government fuel economy standards didn’t change, fleet efficiencies actually decreased.

Automakers aren’t dummies, which is why the Alliance of Automobile Manufacturers asked the Trump administration to not freeze the CAFE standards. Without government regulation, automakers have zero incentive to push for such goals.

Big Boy Gains

Perhaps the biggest winners in this march to improved fuel economy standards are people who drive full-size trucks and SUVs. It used to be that 12 mpg was a common rating for such vehicles, ensuring that owners shelled out plenty of cash at the pump. Now, there are multiple options for these kinds of trucks and SUVs that attain 20 mpg or better, which is a tremendous gain. That means almost halving operating expenses, a big win for consumers.

The Trump administration has argued that vehicles which can go further on a gallon of gas puts lives in danger, something that has been largely called into question. One of the tenants of that argument is that lighter vehicles are more dangerous. By turning to lightweight materials like high-strength steel and aluminum to make full-size trucks and SUVs, studies by the NHTSA and others show that everyone is at less risk of death or serious injuries. This is especially true for anyone in a smaller car struck by a full-size truck or SUV, so hopefully everyone walks away from the accident. If anything, we should be scared that pretty much anyone could be driving a 7,000 pound battering ram down the highway at 80 mph.

Volatility

If you’ve lived long enough, it shouldn’t be too hard to remember when gas cost less than $1.00 a gallon. Not too long after that heyday of cheap fuel, gas prices were pushing well over $5.00 a gallon in many parts of the United States. Why?

Petroleum is a highly volatile commodity. Prices can swing wildly, leaving us at the mercy of the market. While the US is producing more oil domestically than ever before, that doesn’t completely eliminate the risk of global fluctuations of supply and demand.

Surges in the cost of oil have a negative effect on the economy. The cost of many goods rises dramatically, pinching the average consumer in more ways than just at the pump. Being less dependent on the erratic petroleum market is a huge positive.

Not the End of Fun

Driving isn’t always fun. Admittedly, going to the grocery store or traveling to a relative’s for dinner is usually a mundane, unexciting task. But that doesn’t mean we have to smother all the chances of ever having fun behind the wheel.

Plenty of enthusiasts have vehemently raged against CAFE for supposedly squeezing any diversion out of driving. The facts don’t line up with that viewpoint. With rising fuel economy standards, we’ve actually seen even more powerful performance cars. Lightweighting has become key for such vehicles, which improves acceleration, handling, and stopping performance. If anything, pushing for better efficiency has resulted in more potent vehicles than ever. There will always be those who complain the cars of yesteryear were better for a whole list of reasons, but that’s more a function of nostalgia than reality.

The Twist

After outlining everything above, there is a catch. Many automaker executives have been quite vocal about CAFE standards being too aggressive. They want fuel efficiencies to be mandatorily increased, but not quite as quickly as the Obama administration favored.

Why would this be? For one, squeezing more efficiency out of a vehicle powered by an internal combustion engine certainly is possible, but it’s expensive, at least at first. The march to cram advanced technologies into cars has been one of the main contributors to the dramatically rising cost of vehicles, something everyone should be concerned about.

While EV proponents rightly point out that ditching the internal combustion engine would eliminate this problem, that proposed solution likely would skyrocket costs even more. The high cost of EV tech is among the reasons why Tesla struggles to turn a profit.

Already, there’s a problem in the industry with an increasing portion of shoppers priced out of the new vehicle market. Several factors are contributing to the situation but slowing down fuel efficiency standards could help with deflating costs.

As we use less petroleum, some jobs will be lost. But, plenty of studies have shown that the overall economy will suffer if we eliminate increased fuel efficiency standards. Innovating how cars use fuel creates jobs, pumps up the economy, and offers economic benefits that far outweigh the alternative.

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