A new energy bill passed in the House of Representatives
last week which would raise
Corporate Average Fuel Economy (CAFE) fuel economy standards 40 percent to
35 MPG by 2020. The measure passed 235-181 and calls for the standards to be progressively
implemented starting with the 2011 model year.
Not surprisingly, reaction to the higher CAFE standards have
met with mixed reactions from the automotive industry. Toyota, which has
recently come under fire for a faux-green
facade, is fully committed to working towards the 35 MPG standard.
"We commend congressional leaders for their diligence
in hammering out a difficult deal on fuel economy. We at Toyota have long said that we want a
bill this year and now the Congress appears poised to deliver," said Toyota
Motor Sales President Jim Lentz. "This bill will challenge all
automakers to achieve dramatic fuel economy increases. It represents a major
step in the right direction that will result in significant oil savings and
reductions in CO2."
Toyota is sitting pretty with a current overall CAFE average
of 29.0 MPG (34.8 MPG cars/24.1 MPG trucks), so the comments from Lentz are not
surprising. The company already has a bevy of fuel efficient cars including the
Yaris, Corolla, Prius and Camry Hybrid. The company is also working on making
vehicle fleet hybrid by 2020 and will add a diesel
engine to its gas-gulping Tundra full-size pickup within the next two model
Commentary from General Motors, however, didn't sound so
enthusiastic. "Maximum" Bob Lutz, Vice Chairman of GM, was less
optimistic about the plan.
"The minute we have confirmation of the 35 mpg rule,
that is the point where we go through all of our forward product plans and
probably introduce, frankly, massive restructuring of the product plan,"
said Lutz to Automotive
News. "A 35 mpg fleet mix means there is a bunch of stuff out
there that is going to have to be 40 and 50 mpg."
Lutz went on to add, "We will have to take a look at
everything because we’re going to have to come up with a plan which gets us to
2015, 2017, gets us part of the way there, and with clarity on how we’re going
to get the rest. Then we will have to start raising prices as we introduce the
Whereas Toyota is sitting at 29 MPG for its corporate CAFE
average, GM is further back at 24 MPG (28.1 MPG cars/21.3 MPG trucks).
GM has done much to introduce more efficient vehicles over
the past few years including the Saturn
Vue Green Line, Saturn
Aura Green Line and Malibu Hybrid. The company is also lining up its Tahoe/Yukon
Hybrids and the all-electric Chevrolet
However, Lutz's main worries are with regards to the
potential gas guzzlers in the company's current roadmap. The company is on the
verge of releasing its high-performance Pontiac G8 sedan which comes with
either a 3.6 liter V6 engine or a more potent 6.0 liter, 362 HP V8. Also on tap
is a new Impala using the G8's platform/engine, a new Camaro with a requisite
V8 engine option and a small
RWD Pontiac G6 performance sedan built on the Alpha platform.
Bob Lutz is likely one of the most vocal and most
high-profile executives in the auto industry, so his comments aren't too
surprising. Other auto manufacturers, however, have remained relatively mum on
the new CAFE standard. Those with the most to worry include Ford with a
corporate CAFE of 24.3 MPG and [former] Daimler-Chrysler with a corporate CAFE
of 23.3 MPG.
Honda and Hyundai-Kia are within striking distance of Toyota
with corporate CAFE ratings of 28.7 MPG and 28.6 MPG respectively.
The House energy bill also includes provisions for a $21
billion USD tax on oil companies and will require electric companies to get 15
percent of their energy from renewable sources. The bill is having trouble in
the Senate because of these two provisions.
"[Oil] is the most profitable industry on earth and we
need to pay for the bill," said Democratic Senator Debbie Stabenow. On the
opposite side of the spectrum was Republican Senator John Cornyn of Texas.
"This bill could pass in a day if they stripped the taxes out and the
renewable portfolio standard" for electricity production."
Tougher fuel economy standards are likely to come down
eventually no matter how long politicians and car companies tried to avoid the
possibility. It's likely in the best interest of auto manufacturers to buckle
down and plan ahead instead of hoping that the "worst thing possible” --
i.e. tougher fuel economy standards -- will never happen.