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Corporate Average Fuel Economy standards run into speed bumps

Clare Goldsberry

August 10, 2016

5 Min Read
Corporate Average Fuel Economy standards run into speed bumps

Despite all the progress made in lightweighting to meet the Corporate Average Fuel Economy (CAFE) standards that were arbitrarily set in 2012, it appears that they may be unattainable. A lot of people in the automotive industry know that, regardless of the continued push by the Environmental Protection Agency (EPA) toward an average 54.5 mpg. A Wall Street Journal editorial from the January 13, 2016, edition ("GM Speaks Untruth to Power") by Holman W. Jenkins, Jr. takes a hard look at GM’s Lyft investment and questions whether any of this will, in actuality, make good business sense.

Image courtesy Michelle Meiklejohn/
freedigitalphotos.net.

Many automotive OEMs are hurriedly building smaller vehicles that promise to meet CAFE standards to help offset the vehicles that won’t. But then the carmakers don’t talk about that or “what’s really going on.” Jenkins points out that he recalls GM CEO Mary Barra sitting before 2014’s congressional Cobalt hearings and declining “to acknowledge the troubled, money-losing small car was built by GM only to meet federal fuel standards.”

The vehicles that are the money makers for the OEMs tend to be the larger SUVs and pickup trucks, and anyone who studies the automotive industry’s sales knows this. The smaller vehicles that get the higher mpgs are most likely “loss leaders” that do little more than help OEMs meet the “average.”

Jenkins also notes that “electric cars’ enlistment in the climate wars makes little sense either: Two-thirds of America’s electricity is produced by burning fossil fuels, and U.S. passenger cars account for less than 2% of global emissions anyway. So converting [cars] to electricity solves nothing.” Jenkins wrote that “a big factor—unless economics is a deluded field of study—is the forced diversion of billions of dollars into fuel economy, which Detroit should be loudly criticizing.” Instead of adding greater costs to vehicles through lightweighting, which adds somewhere between $3,000 and $5,000 to the cost of a vehicle, Jenkins believes that they should give consumers something “they might prefer for their $30,000 sticker price.”

In “Fight Looms Over Mileage Rules” in the August 4, 2016, edition of the WSJ, journalist Mike Spector writes about automakers and EPA regulators “publicly sparring over stringent fuel-economy standards, signaling a pitched battle ahead over whether to relax the Obama administration’s future mileage targets.”

Spector attended an automotive conference in Traverse City, MI, where lobbyists for the automotive industry “seized on a July Environmental Protection Agency report that predicted car companies will sell vehicles averaging roughly 50.8 mpg by 2024 . . . .” Regulators, said Spector, believe that automakers can comply with the stricter standards, but, he notes, “the EPA, with other agencies, must decide by April 2018 whether the standards should be relaxed, strengthened or left unchanged,” and are awaiting comments from the automotive OEMs before making proposals on the matter.

Much to the disappointment of the National Highway Safety Administration and California environmental regulators, it appears that “lower prices at the gas pump are spurring purchases of fuel-thirsty pickup trucks and sport-utility vehicles.” Given that “car sales determine” automakers’ compliance, selling more of the lower-mileage vehicles makes it harder for them to meet the standards.

At this past May’s Plastics-In-Motion automotive lightweighting conference held in Charleston, SC, Boney Mathew, President & CEO of Mathson Composite Group LLC, gave a presentation titled, “Innovative Automotive Skid Plate & Underbody Shield Composite Technology,” and talked about the developments in lightweighting in this area. The goal, explained Mathew, is to develop a carbon-glass-fiber composite solution for skid plates, resulting in a reduction in skid plate weight by 25 pounds (current metal skid plates are 47 pounds).

The constraints to this effort included no reduction in functional objectives (load and deflection and ground clearance); maintenance of impact protection; no reduction in fuel volume; and no impact to fuel tank supplier and assembly plant processes. The potential fuel efficiencies and CO2 reduction using composite skid plate technology were significant. “The benefits of even modest vehicle weight reduction are significant,” he noted. “Reducing an automobile’s weight by a mere 110 pounds reduces up to 5 g of CO2 per kilometer and increases fuel economy by up to 2%. That’s big for an OEM!”

With the steadily evolving trends in lightweighting comes the obvious question: What about safety? Vehicle safety has for the past three or more decades been the number one priority of various government agencies, insurance trade groups and consumer products groups. The Insurance Institute for Highway Safety produced a Q&A in March of this year on its website, answering questions about vehicle size and weight and their relationship to safety. “All other things being equal, occupants in a bigger, heavier vehicle are better protected than those in a smaller, lighter vehicle,” the IIHS said. “Driver death rates calculated by IIHS illustrate the real-world advantages of bigger, heavier vehicles.”

However, it was noted on the IIHS website that vehicle improvements in crash protection as well as vehicle design have helped reduce the number of deaths in unmatched incidents (smaller vehicles in crashes with larger vehicles), but drivers of small cars such as “minicars” have higher death rates.

Mark Jacobsen, Associate Professor, Department of Economics, at the University of California San Diego, noted in an economic study of lightweight cars that “smaller cars may offer less protection to their own occupants but greatly reduce fatalities for people in other vehicles,” he wrote in "Fuel Economy & Safety: The Influence of Vehicle Class & Driver Behavior," published in the American Economic Journal: Applied Economics.

The lightweighting of vehicles has been a boon for advancements in the plastics and reinforced plastics composites industries, from which consumers are seeing many benefits, including increased mileage. When push comes to shove in the debate between automotive OEMs and the EPA, however, the final say may come down to the issue of safety, and both parties have to ask: “How small and light can we go before death rates in these vehicles rise to unacceptable levels?”

Or do government regulators ignore the death rates and count these as “collateral damage” in the valiant effort to “save the planet”?                

About the Author(s)

Clare Goldsberry

Until she retired in September 2021, Clare Goldsberry reported on the plastics industry for more than 30 years. In addition to the 10,000+ articles she has written, by her own estimation, she is the author of several books, including The Business of Injection Molding: How to succeed as a custom molder and Purchasing Injection Molds: A buyers guide. Goldsberry is a member of the Plastics Pioneers Association. She reflected on her long career in "Time to Say Good-Bye."

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