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Tuesday, April 12, 2022

CAFE Standards Are Back - But Hard to Find in the News

Back on April 1st, Transportation Secretary Pete Buttigieg announced new CAFE (Corporate Average Fuel Economy) standards for all vehicles to be sold in America, starting in 2024-2046.  The US Department of Transportation (DOT) has a propaganda an informational page on the new standards which require a CAFE of 49 mpg by '26.  To borrow a quote from the wonderful Mark Steyn, it reads like a refrigerator manual written by someone who really loves refrigerator manuals. 

The new Corporate Average Fuel Economy standards require an industry-wide fleet average of approximately 49 mpg for passenger cars and light trucks in model year 2026, the strongest cost savings and fuel efficiency standards to date. The new standards will increase fuel efficiency 8% annually for model years 2024-2025 and 10% annually for model year 2026. They will also increase the estimated fleetwide average by nearly 10 miles per gallon for model year 2026, relative to model year 2021.

Clarity?  Not much.  

Stepping back a bit, I've been writing on battles and skirmishes over CAFE standards for a long time, starting with the push to create a 54.5 mpg standard from the first Obama term's DOT back in 2012.  CAFE Standards are best thought of as the "A" in the name - the average over the vehicles they sell.  Regulating the average says that every vehicle in the manufacturer's lines doesn't need to get 49 mpg, just that the average mileage of everything they sell needs to hit this magic number.  The rules specifically apply to "cars and light trucks" while heavier trucks are in a different class.  The fact that cars are treated differently than trucks is one of the reasons for the popularity of SUVs versus station wagons.  You don't see many station wagons being made these days.  There is great legal wrangling and fighting over how to classify any given vehicle because not every vehicle has a prayer of hitting that kind of mileage.  If the requirement can't be approached, the companies have to restrict the number of SUVs or other light trucks they can sell to push the average up.  This has to all be calculated out in advance as they're determining how many of which models to make. 

I never worked in the auto industry (but I did stay in a ... sorry) but I'm pretty sure that they're working on the preparations for the '23 model year now.  My guess would be that it's too late to make any substantial changes to the 2024 models and preparation for the '25 models isn't likely to be much better.  The way I read that line that, "The new standards will increase fuel efficiency 8% annually for model years 2024-2025 and 10% annually for model year 2026." may be something lawyers would make a million bucks on, but if 2025's CAFE can be 10% less mileage than 2026, that's 44.1 mpg.  2024 can be 8% lower, or 40.6 mpg and 2023 can be 8% lower than that or 37.3 mpg.  The DOT says the current standard is, "a combined fleet-wide fuel economy of 40.3-41.0 mpg."   

Car makers need to figure out how many of their SUVs or muscle cars they can sell balanced against anything in their fleet that gets over 50 mpg (and the higher the better) to bring their averages up.  

Regular readers know I'm fond of pointing out that physics is a bitch and you don't get something for nothing.  The only places where the laws of physics get broken is in commercials and Looney Tunes.  The internal combustion engine has been optimized as a system for over a hundred years, and you're not going to suddenly make it much more efficient.  Instead, to reach the new standards the cars will get lighter, with more plastics and thinner metal structures.  The shorter way to say that is they'll be less safe.  The new standards will cost more lives.  

Reporting on the new standards, the Center for Automotive Research (CAR, of course) quotes DOT indirectly.  

The NHTSA press release notes that under the new standards, fuel consumption will decrease fuel use by over 250 billion gallons through the year 2050 compared to sustaining the previous Trump-era standards. Less reliance on foreign oil, consumer savings on gas, and reduced emissions were also emphasized in the announcement as an advantage of stronger standards. Officials highlighted that carbon emissions would be reduced by 2.5 billion metric tons and estimated that consumers could save almost $1,400 in fuel expenses over the lifetime of a 2029 model vehicle under new rules. However, it is also estimated that the new regulations will likely drive up the cost of new vehicles by nearly the same amount.

Two reactions: first, saying "almost $1,400" is recognizing that we're currently in a situation with very high fuel costs, and if we had lower fuel prices the savings would go down.  Saving that amount over the life of a car is a pretty trivial savings.  $140/year or $11.67/month for a car kept 10 years.  Second, I don't believe that the cost will be equal to what's saved on fuel.  The last several times this was studied the car costs went up more than the money saved on fuel.  

I'm going to reuse a graphic from my 2012 article on the CAFE standards, which shows the annual cost of gas at three prices per gallon from $1.50 to $5.00 gallon, versus the car's mileage and assuming driving 15,000 miles per year.  The curves display a similar shape, illustrating the diminishing returns for each incremental increase in mileage.  At the top curve, a 10 mpg increase from 20 to 30 mpg saves $1,250 or 33.3% less for 50% higher mileage; a 10 mpg increase from 40 to 50 mpg saves $375, or 20% less for 25% higher mileage.  All of the bigger gains were taken on the left end of that plot.

The problem, as always, is that government has no business regulating this sort of thing.  It's the most common, fatal conceit of our single-minded bureaucrats that they think they know better than the free market.  I've got news for the administration: a real half ton pickup (the most common size) that got twice the current MPG would be snapped up so fast it would set every truck sales record there is.  Nobody's against that.  We're just against being forced to pay more for a flimsier, less safe vehicle than we save by buying it, and we're against getting stuck with one that doesn't do everything we need it to do. 

 

 

6 comments:

  1. Many of the morons in power tru!y believe that by passing a law or creating a regulation the subject being mandated automatically becomes possible....to hell with the actual laws of physics.

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    1. They do not CARE if it is possible. Do you think the vehicles THEY use will meet these requirements? And you have no need for personal transportation under their world view!!!

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  2. I've done the economics on an electric car - they just never, ever pay out except at ludicrous fuel prices. Maybe, then, that's the plan?

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  3. Now, to make matters worse, the EPA is pushing 20-30% Ethanol enhanced gas as a way of 'growing' us out of reliance of foreign oil.

    And we all know that ethanol causes less milage.

    So higher MPG requirements at the same time they're forcing 'weaker' gas on the public.

    At the same time, all that farmland that should be growing food is now going to be growing fuel, at government subsidies, yet if farmers want to grow food the FedGov will punish them by fines, not promising food prices and, of course, sicking the EPA and the BLM and whomever 'controls' water on the poor farmers that are trying to grow food and not fuel.

    It's almost like they're intentionally trying to destroy us, isn't it?

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  4. First, understand that these @&$% brain dead bureaucrats are doing this because our equally @&$% elected representatives and senators in Congress have not said "stop that."

    Second, it displays an incredibly severe case of financial myopia: as cars get lighter and lighter through the use of thinner and flimsier materials not only do they get very substantially less safe, they suffer severely shortened life spans.

    The V-8 has been driven out by the V-6 (Toyota no longer puts V-8s in Tundras, they've gone to 6 cylinder engines to save weight, it's a safe bet within a couple years they'll trim two cylinders off that as well).

    As engines shrunk from 8 to 6, then 4 cylinders to save weight, horsepower and torque declined in parallel. Auto makers went to turbocharging in an attempt to recover the lost horsepower without incurring a gas-eating weight penalty. Those lumbering small block V-8s of yore would run nearly forever given basic maintenance; the 265 and 283 CID V-8 Chevy engines became legendary for longevity, as did the 318 Chrysler, Ford 289s, because they moved the car at acceptable speeds and acceleration rates without working hard.

    The tiny 1.4 - 1.8 liter aluminum block turbo engines coupled to 8-speed transmissions have to scream their guts out to do the same thing; does anyone think those slot car motors will go 3-400,000 miles between rebuilds? Will there even be anything worth rebuilding at 100K? Old 'Murican V-8s would serve the original buyer for 4-8 years, then embark on another 15-25 years of being repeatedly sold in the used and well-used market, all usually without major rebuilds of anything, until rust or a crash finally killed it.

    The @&$% bureaucrats are punishing Americans to save a few hundred gallons of fuel over the much shortened life of today's toy cars and completely ignoring the life cycle costs of frequent car replacement because the entire car must be replaced after even a slightly more than minor accident, or when it accumulates enough wear to not be financially feasible to rebuild, which will be a lot sooner than those old lumbering V-8 powered rides.

    What's the cost of mining the multiple ores, making the plastics, engineering and building the car, and transporting everything hither and yon when Susie Q's spiffy little 2-door tinfoil and plastic car-like device croaks - too expensively to fix - at 80-90K?

    "But all that activity creates jobs" is the Left's cry, never mind what kinds of job, doing what.

    Where the hell did all the grownups go? Efficiency is one thing, and like productivity, should be rewarded, but Americans used to be smart enough to not do stupid s**t like this. These Green bastards will wind up making us live under bridges or killing us all unless we stop them.

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  5. Yet again only one factor is addressed, to the exclusion if all other factors.
    This is one of several reasons that the average car on the roads in the US is 19 years old at this point.
    I'm surprised the feds haven't tried to restrict older cars in some way.

    Don't forget that this fuel economy goal is not based on real world conditions, but a specific test that yields high numbers. There are also carve outs and credits for electric vehicles and things like turning the engine off at lights. That used to be an option that could be turned off, but in many cars now it can't be changed.

    Don't forget all the other federal mandates that affect cars such as crash testing, backup cameras, lane detection and other gadgets that will supposedly make accidents impossible...

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