Study Claims CAFE Loopholes Will Make Vehicles Larger, Not Smaller
December 14, 2011 12:46 PM
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Could the proposed standards lead to automakers vacating smaller platforms?
that have been looming all year will force some major changes on the automotive market. The government says that the much more stringent fuel economy standard will save consumers at the pump and reduce the national need for foreign oil. The auto industry has said that the cost of meeting the standard would
increase the cost of new vehicles
could result in lost jobs
According to a new study published by the University of Michigan, the CAFE standards will make cars larger, not smaller. The study indicates that there is a loophole in the economy standards that the automakers could exploit.
"For just about all the scenarios, the car got bigger,” said Steven Skerlos, an associate professor at U-M Department of Mechanical Engineering. “What you can model in a computer is different from reality, but based on this research we expect it to happen."
The loophole is that the formula used for determining miles per gallons required under the new standard uses the vehicles footprint (multiplying the wheelbase by track width). This was done to give larger vehicles less stringent economy standards to follow. In a nutshell, the formula favors larger vehicles and those vehicles may be less costly since they wouldn't have to use as much technology for fuel gains.
Therefore, automakers may design new vehicles to be larger in an effort to target the lower economy standards. The study also claims that not only would the automakers considering redesigning a vehicle to go for the lower economy limits undermine the CAFE standard goals, but it would also create more pollution
"This study illustrates that there may be a substantial financial incentive to produce larger vehicles, and that it can undermine the goals of the policy," said Kate Whitefoot, who conducted the research as a U-M design science doctoral student and is now a senior program officer at the National Academy of Engineering.
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12/14/2011 5:18:49 PM
Supply-side market manipulation like CAFE tends to result in underproduction of vehicles consumers want, and overproduction of vehicles consumers don't want. With CAFE in particular, while it has driven the MPG of cars up, it's also driven up the sales of light trucks relative to cars (from about 15% in the 1950s-1960s to about 50% today). Light trucks (and SUVs) have to meet a lesser CAFE standard, and with cars being forced smaller by CAFE, people have gravitated towards SUVs as the vehicle of choice if you want a large car.
Overall, I'm not really sure it's saved us much gas since SUVs (which weigh more and experience more air resistance) tend to guzzle more gas than large sedans. And due to the inverted MPG metric, someone switching from a 25 MPG sedan to a 18 MPG SUV completely cancels out the fuel savings of someone switching from a 25 MPG sedan to a 40 MPG econobox.
Demand-side market manipulation as OP proposes avoids this problem. You increase the fuel tax. The higher fuel price drives consumers to buy smaller, more fuel-efficient vehicles, and the automakers shift production in response..
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