NADA: 54.5 MPG CAFE Proposal Could Tack Another $5,000 to New 2025 Model Prices
January 18, 2012 10:03 AM
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U.S. regulators say it isn't a big deal, since consumers will save on fuel over the vehicle's lifetime
A National Automobile Dealers Association (NADA) official said a new Corporate Average Fuel Economy (CAFE) proposal could add as much as $5,000 to the sticker price of a new vehicle.
The new CAFE proposal aims to increase the average fuel economy of cars and light trucks sold here in the U.S.
to 54.5 mpg by 2025
in an effort to reduce greenhouse gas emissions and lessen the country's dependency on foreign oil.
Don Chalmers, chairman of NADA's government relations committee, announced in a Detroit hearing for the proposal that nearly doubling today's fuel economy standards would force manufacturers to use expensive "fuel-saving technologies" that would bump up the sticker price of a new vehicle an extra $5,000. NADA is expected to release a study next month showing that the costs for the new higher fuel-economy standards will overshoot government estimates by over 60 percent (meaning an extra $5,000 to the sticker price for new 2025 models).
Chalmers argued that an extra $5,000 would put many potential buyers out of the new-car market because it could add another $60 to $70 to a monthly car payment and hurt a customer's chance to receive financing.
"I want to sell more fuel-efficient cars," said Chalmers. "If the customer can't get financing, it makes no difference."
U.S. regulators see the situation differently, though. Many believe the extra $5,000 wouldn't be an issue because customers save on fuel over the lifetime of the vehicle.
"We're hearing broad support," said Margo Oge, director of the Office of Transportation and Air Quality at the Environmental Protection Agency. "What we heard is that this standard will create green jobs. This is what the consumer wants. This is where the companies want to invest. So, overall, it's been very positive."
Other supporters for the
new CAFE proposal
by the Obama administration include 13 major automakers, such as Ford Motor Co., General Motors, and Chrysler; United Auto Workers (UAW), and environmental groups like the National Wildlife Federation.
"These proposed rules will reduce the pollution that contributes to climate change, significantly reduce America's dependence on foreign oil and save American families money at the pump," said Bob King, UAW President, who added that the proposal could save customers around $4,000 over the life of the vehicle. "They will also create jobs in the auto industry and throughout the economy."
"This proposal provides our industry both a single program moving forward, as well as regulatory framework that enables manufacturers to plan and invest for the future with confidence," said Sue Cischke,
Ford Motor Co.'s
vice president of sustainability, environment and safety engineering. "We are committed to working with you to finalize these regulations. The standards proposed are aggressive, but so are the demands from our customers for greater fuel efficiency."
Others, such as Volkswagen AG and Daimler AG, are on Chalmers' side with opposing the new CAFE proposal. They say the new proposal offers "no new incentive for diesel cars."
The hearing for the proposal was one of three that will be held to give the public a chance to comment. The other two are scheduled for January 19 in Philadelphia and January 24 in San Francisco.
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1/18/2012 10:52:01 AM
Q: What will world population and energy demand be in 2025, less or greater than current levels?
A: Greater, meaning higher prices for oil, a limited and non-renewable resource.
Q: Do currently produced cars meet this mileage standard?
A: Yes, so the technology already exists.
Q: Will auto makers be able to improve upon this technology to make it more affordable in the next 14 years?
A: Yes, making the claim that these standards would still cost a premium in 14 year's time just a farce. 14 years is a long time for technology. 14 years ago, Google hired its first employee. You must see this $5000/car figure as a fictional smokescreen.
I'm not sure what their motivation is, since market forces will push them in this direction anyway. Is it a ploy by the auto companies to try to avoid the R&D costs? American auto makers have often behaved this way, and it lead to two out of three going bankrupt (remember that, kids?). I'm guessing Detroit would love to lag behind in improving efficiency to make short-term profits, but lose the long game. Again.
RE: Two observations:
1/18/2012 3:27:07 PM
1. The government has never been correct in its estimations of anything that has a price tag. Based on this, $5000 is probably still too low, IMO.
2. Cars are more expensive today than before. Not all of that is inflation. As a matter of fact inflation has gone up very little in the past 10 years but car prices have increased dramatically.
3. Making every car essentially get 36 mpg combined is a FAR cry from making ONE or TWO cars get 36 mpg combined.
4. You are correct that the tech is there. It can definitely be done, it justs costs money. Like fuel prices (and everything else that rides on the price of fuel), costs will increase. This is why I mentioned in #1 that i think it will cost more than $5k. These cars will be produced in 2025 dollars not todays dollars.
RE: Two observations:
1/20/2012 12:46:30 AM
Not just you, but did you dumbasses notice it's the NADA quoting the $5k figure, NOT the government?
The NADA is the National Auto Dealers' Association, a trade group representing car dealers. Given that they represent a bunch of slimy car salesmen, they're obviously pulling this figure out of their asses, going high over what the gov't has said you will save in gas costs. Show me the engineers they have on staff that understand all the technologies involved, and I'll buy what they say. Since they probably don't even have a fundamental understanding of how better fuel economy is achieved, how do they have any credibility at all?
As to the Camaro comment above - true. But, did you take into consideration the fact that the 305
? It was one of the worst engines GM ever built. That it had 155 hp alone says it wasn't tuned for shit.
Also, note the CAFE standards are 'fleet' - that is, for every model getting 50 mpg, the manufacturer can have a model getting 22 mpg, which puts them at 36 mpg average. So you have your econobox car, and your 3/4-ton, penis-compensating
. Sales volume doesn't count, either. Rebadge a base model tuned to hit 60 mpg, but they're factory-order-only or the like, making them almost impossible to acquire, now you've got an offset for your Hummer clone.
Plus, why are they going against the manufacturers on this? Seems most of the domestics are for it (at least publicly - I'd like to see who they're paying off to make this not happen.)
"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997
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