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Despite uncertainty about possible changes to CAFE standard, carmakers push forward

Article-Despite uncertainty about possible changes to CAFE standard, carmakers push forward

Fuel gauge
Detroit automakers and some foreign vehicle manufacturers have lobbied the Trump administration to roll back tough CAFE standards as unrealistic. But what will happen is anybody’s guess.

As President Obama neared the end of his term, his administration pushed to finalize stringent fuel economy rules that are estimated to add $2000 to the cost of a vehicle. According to an article in the Detroit News (Jan. 13, 2017), the new rules would require automakers to produce car and truck fleets to “average around 50 mpg by 2025, which by law were originally set to be reviewed for their feasibility by April 2018.” In mid-March, President Trump ordered a “tough review” of those Obama-era fuel economy standards. Detroit automakers and some foreign vehicle manufacturers have lobbied the Trump administration to roll back these tough Corporate Average Fuel Economy (CAFE) standards as “unrealistic.”

But what will happen is anybody’s guess. Publicly, few automakers are saying anything about their desire to reduce these stringent rules. As for the auto suppliers, they’re moving ahead with their lightweighting technology developments as if the standards will remain in place.

In his keynote presentation at the recent Plastics-In-Motion congress held in Troy, MI, from June 4 to 7, Daron Gifford, a partner leading Plante Moran’s Strategy and Automotive Consulting practices, noted that every vehicle will have to improve more than just a fleet average of the mix. “The requirement for each vehicle size (by footprint) is actually the same as the requirements set in 2012,” Gifford explained to PlasticsToday. “At that time, the EPA calculated that the mix of cars and trucks sold in the overall national fleet as new vehicles in 2025 would average 54.5 mpg overall. However, last summer they recalculated the mix of cars and trucks projected to be sold in 2025, and the mix was shifted—about 60% trucks and SUVs, 40% cars—while in 2012 it was the other way around.

“Consequently, the overall fleet average in the country came down to around 50.8 mpg. So, none of the standards changed; the EPA just declared that the projected average would be lower, and the media jumped all over it as relaxing the standard,” said Gifford.

Gifford said that vehicles that fail to meet that standard will be penalized, “which could cost OEMs billions,” he added. “It’s unlikely that the rules will change significantly, but they may be pushed back a bit based on greenhouse gas calculation. The rest of the world is already there.”

Still, the question remains what is possible with the gasoline combustion engine? Gifford  pointed out that while the gasoline combustion engine is a “great technology, it just can’t get to the 60 mpg for large vehicles; it needs help through all electric vehicles, battery EVs and plug-in hybrids.”

News reports have noted that Detroit automakers and “some foreign manufacturers” have approached the Trump administration, lobbying for a roll-back of the tougher gas mileage standards as “unrealistic.” However, it’s doubtful that any of the automakers will halt the technology development that has been moving full-steam ahead for the past five years because of the extensive investments and the benefits that the industry is seeing from its lightweighting efforts. Off-the record comments from some in the automotive industry show that any “significant” changes to the current CAFÉ standards are doubtful.

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