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President also calls for increases on federal spending for CNG vehicles, vehicle research, and EV tax credits

At a speech at Georgetown University in the nation's capitol, President Barack Obama's (D) message to automakers was simple -- "told you so."

I. Obama Crows Over Fuel Economy Victories

He remarked:

The fuel standards that we put in place just a few years ago didn’t cripple automakers.  The American auto industry retooled, and today, our automakers are selling the best cars in the world at a faster rate than they have in five years — with more hybrid, more plug-in, more fuel-efficient cars.

The old rules may say we can’t protect our environment and promote economic growth at the same time, but in America, we’ve always used new technologies — we’ve used science; we’ve used research and development and discovery to make the old rules obsolete.

The Obama administration is celebrating a win in which it convinced automakers to adhere to signficant increases to the CAFE (Corporate Average Fuel Economy) standard.  


Under President George W. Bush (R) and the 2007 Congress, the CAFE standard -- which covers light trucks and sedans -- was scheduled to hit 35 mpg by 2020.  President Obama first succeeded in bumping that target to 34.1 mpg by 2016 after initially asking for 35.5 mpg by 2016.

Following that success, the President's team pushed for a much higher standard for 2025 -- as high as 62 mpg.  Automakers said that increase would "kill" the auto industry, but eventually begrudgingly caved to a target of 54.5 mpg by 2025.

The result is a mixed bag -- customers will save thousands of dollars at the pump over the lifetime of their vehicles (the exact amount is dependent on the price of fuel), but will pay $2,059 USD more for a new truck and $1,726 USD more for a new car on average (critics contend the true price increase will be at least twice that).  And automakers have to swallow an estimated $200B USD in costs for developing advanced fuel efficiency technologies.

In his speech, the President also plugged General Motors Comp. (GM) -- a bailout recipient -- for making a climate change pledge. The President remarked, "More than 500 businesses, including giants like GM and Nike, issued a Climate Declaration, calling action on climate change 'one of the great economic opportunities of the 21st century.'"

GM makes the Chevy Volt plug-in electric vehicle that both President Obama and former President George HW Bush are big fans of.

II. More Regulation Ahead?

Emboldened by the concessions that he has already won from the industry, the President proposed more regulation in his speech -- including a fresh round of CAFE targets for heavy duty trucks.  The heavy-duty truck segment (which includes semis, garbage trucks, buses and three-quarter-ton pickups) was first regulated under President Bush's Energy Act of 2007, which calls for a 20 percent increase in average fuel economy by 2018.

The standard refresh would go into effect by 2018, and force that vehicle segment -- which typically features inherently poor fuel economy -- to continue more yearly bumps in efficiency.  Despite the gains since 2007, heavy-duty vehicles are still the second largest source of emissions in the transportation sector, according to the White House.

Super Duty rear
President Obama was new fuel economy targets for heavy duty trucks.
[Image Source: Jason Mick/DailyTech]

Other automotive highlights of the speech included a reiteration of the President's call to bump the electric vehicle tax credit to $10,000 USD, a demand for more federal advanced vehicle research funding, and a push to give new tax credits compressed natural gas (CNG) vehicles.

The President also called for regulations to limit the amount of carbon power plants can emit -- regulations that could force coal and oil burning plants to purchase expensive carbon capture and storage systems.

The speech compared these changes to the introduction of the federally forced introduction of the catalytic converter in 1970 (via the 1970 expansion of the Clean Air Act to cover automobiles), which critics complained would damage the industry.  He remarked:

At the time when we passed the Clean Air Act to try to get rid of some of this smog, some of the same doomsayers were saying new pollution standards will decimate the auto industry. Guess what — it didn’t happen. Our air got cleaner.

The President threatened the oil industry that he wouldn't approve the Keystone oil pipeline unless it cooperated with emissions improvements, remarking that the pipeline would be approved "only if this project does not significantly exacerbate the problem of carbon pollution."

Coal power station
The President wants stricter emissions standards for power plants. [Image Source: Reuters]
 
At least some of the President's demands are unlikely to be fulfilled given the Republican control of the House.  Thus far Republicans in Congress have fought efforts to bump tax credits for EVs/plug-ins and efforts to increase vehicle research funding.

Source: White House on YouTube



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RE: He is right....
By TheDoc9 on 6/26/2013 2:44:51 PM , Rating: 2
True, assuming the Chinese don't take the technology after we've footed the bill designing it.

I'm also skeptical of the 2025 fuel target. This will probably only be possible if every new vehicle is at least a hybrid.


RE: He is right....
By FITCamaro on 6/26/2013 3:42:53 PM , Rating: 3
I doubt its possible even then. A Prius sized vehicle doesn't work for a family. And even Fusion/Camry/Accord sized vehicles are topping out around 45 mpg right now. But in 12 years we're supposed to be at an AVERAGE of 54.5? Yes I know it's not quite that cut and dry to the number. But even if it was an average of 40. That means larger vehicles have to FAR better than they do today.

You can't make a pickup truck that gets 25 mpg in the city and 35 mpg on the highway. At least if you want it to be able to do any work. You might be able to hit 22-24 and 30 with diesels. But you know the EPA will likely try to increase emissions standards again before 2025 that will further prevent diesels from becoming big in America.


RE: He is right....
By Spuke on 6/26/2013 3:53:39 PM , Rating: 2
I believe the "real" average is somewhere in the mid 30's which is still difficult. At least not without raising prices (which they're doing already).

quote:
You can't make a pickup truck that gets 25 mpg in the city and 35 mpg on the highway. At least if you want it to be able to do any work. You might be able to hit 22-24 and 30 with diesels.
It's not the engine necessarily, it's the poor aero of large trucks that keeps mpg down. You can hypermile a Ford 1 ton diesel to 30 mpg but only with low speeds and no stops. Getting that kind of economy with normal driving (you know where you obey traffic laws), will take a significant, expensive change in design. I personally don't expect to be able to afford the 3/4 and 1 ton trucks in the future. My only consolation is that I only need a 1/2 ton so not a big deal really. Of course there's always used one's but my guess is that market will see prices spikes and low inventory.


RE: He is right....
By Schrag4 on 6/27/2013 9:49:16 AM , Rating: 1
quote:
It's not the engine necessarily, it's the poor aero of large trucks that keeps mpg down. You can hypermile a Ford 1 ton diesel to 30 mpg but only with low speeds and no stops. Getting that kind of economy with normal driving (you know where you obey traffic laws), will take a significant, expensive change in design.


And would this change in design have any significant impact on this?

quote:
You can't make a pickup truck that gets 25 mpg in the city and 35 mpg on the highway. At least if you want it to be able to do any work.


The point FIT was making is that nobody that pushes their trucks to the extreme will want any change in design if it means the extremes they can push them to will suffer as a result. For people that actually need a truck, such a redesign would be seen as a step backward, not forward.


RE: He is right....
By Spuke on 6/27/2013 5:06:45 PM , Rating: 2
This is all my opinion of course but I think it's a matter of money and what we are willing to buy (like always). You could make a truck get 25/35 and be just as capable but now you're talking a $120,000 (probably much more). No way is anyone buying that.

quote:
The point FIT was making is that nobody that pushes their trucks to the extreme will want any change in design if it means the extremes they can push them to will suffer as a result. For people that actually need a truck, such a redesign would be seen as a step backward, not forward.
No arguments from me here. In order to keep this affordable, a reduction in capability would have to happen and that's NOT going to happen. They might be able to get mid 20's ish mpg hwy with some aero improvements but as long as they have to use DEF the engine is not going to get them there by itself. At least not without significant expense.


RE: He is right....
By JediJeb on 6/27/2013 5:49:31 PM , Rating: 2
It is going to have to be one or the other, emissions or fuel economy. Sure we got better emissions when the catalytic converter was introduced but fuel economy also took a hit on vehicles of the same size. When more mileage was needed the move was made to smaller vehicles until the technology could improve for larger ones, but there still were limits.

The original Dodge with the Cummins Diesels would get 27mpg highway when properly tuned and geared about two decades ago, but they would certainly not pass emissions standards of today when setup like that.


RE: He is right....
By JediJeb on 6/27/2013 5:08:21 PM , Rating: 4
Since they are trying to kill the coal industry this example may not be so accurate, but around here the coal trucks haul 135,000 pounds of coal at a time down the highway(that is their permitted limits here in Kentucky). If you make a truck that gets twice the fuel mileage but can only haul half as much weight, then you have to run twice as many trucks which gains you absolutely nothing as far as emissions go. Yet it will look good on the propaganda when you tell everyone the trucks now get twice the fuel economy.

I guess next they will be wanting bulldozers to be half the size so they can get twice the economy. Wait until they mandate it for farm tractors and cause the price of food to go up. Oh wait, they will just expect farmers to absorb the costs like always so they can have their fuel economy win and keep food cheap.


RE: He is right....
By Solandri on 6/26/2013 4:08:35 PM , Rating: 4
CAFE mileages are different from EPA mileages. They used to be the same back in the 1970s when CAFE was created, but the EPA tests have been updated multiple times while CAFE has not. So 54.5 MPG CAFE is probably closer to 40 MPG EPA.
http://www.edmunds.com/autoobserver-archive/2009/0...

The bigger problem is that all these benchmarks are based on MPG, which exaggerates both the benefit of higher mileage, and the contribution of higher mileage vehicles to the fleet average. If you want to reduce the country's oil consumption, it's much more effective to discourage people from buying low-mileage SUVs, than it is to encourage people to buy high-mileage hybrids. Unfortunately, our use of MPG makes the opposite seem true.

The measure you want to be using is the inverse - gallons per mile. MPG tells you how many miles you can go on a single gallon. But that's not how people drive. You don't fill your car with 15 gallons and say "I have to make this last two weeks," and stop driving when the tank is empty. You have a fixed number of miles you need to drive in two weeks, and use however many gallons are needed to drive that distance. So the correct measure is GPM.

e.g. If your work commute is 150 miles in a week, switching from a 15 MPG SUV to a 25 MPG sedan will go from burning 10 gallons to 6 gallons - a savings of 4 gallons.

Switching from a 25 MPG sedan to a 50 MPG hybrid will go from burning 6 gallons to 3 gallons - a savings of only 3 gallons.

So in a switch from an SUV to a hybrid, the majority of the fuel savings (4 of 7 gallons saved) comes from the 15->25 MPG portion (a 10 MPG difference). Only 3 of the 7 gallons saved comes from the 25->45 MPG portion despite the difference in MPG being 2.5x larger (25 MPG). MPG exaggerates the impact and importance of high mileage vehicles.

Same thing with fleet average mileages. If you're using MPG, the correct way to calculate the average for two cars is 2/MPGavg = 1/MPG1 + 1/MPG2. If you use (MPG1 + MPG2)/2, you exaggerate the impact of the higher MPG vehicle.


RE: He is right....
By Mint on 6/26/2013 9:06:09 PM , Rating: 3
CAFE averages are calculated with the sales-weighted harmonic mean:
https://en.wikipedia.org/wiki/Corporate_Average_Fu...

If a company had two models - one 20mpg, another 40mpg - of standard footprint and they sold equally, then CAFE doesn't consider the average to be 30mpg, but rather 26.7mpg.


RE: He is right....
By BRB29 on 6/27/2013 8:23:56 AM , Rating: 2
the simple explanation is the harmonic mean captures the fuel economy of driving each car in the fleet for the same number of miles, while the arithmetic mean captures the fuel economy of driving each car using the same amount of gas.


RE: He is right....
By MozeeToby on 6/26/2013 4:43:28 PM , Rating: 3
Keep in mind the average includes the eMPG estimates that are given to electric cars. The Tesla Model S gets 88/90 according to the EPA, Tesla could sell just as many 25mpg ICE cars as they do Model S's and still meet the 55mpg standard.

The aggressive goal, combined with the EPA's generous interpretation of electric vehicle mileage is basically saying to the automakers: "get electric vehicles on the road".


RE: He is right....
By FITCamaro on 6/27/2013 5:29:28 AM , Rating: 3
I know exactly what the new standards are trying to do.


RE: He is right....
By Reclaimer77 on 6/27/2013 2:06:39 AM , Rating: 4
quote:
You can't make a pickup truck that gets 25 mpg in the city and 35 mpg on the highway.


Liberal retort: good, then trucks can finally go away. I don't need one, so nobody does!


RE: He is right....
By BRB29 on 6/27/2013 8:36:49 AM , Rating: 1
No I think it goes something like this.

Liberals: Most people don't need one so we shouldn't have it.

Conservatives: I can buy and use whatever I want.

This stereotyping is retarded and entirely inaccurate. For example, I know plenty of black people who bought low mileage big vehicles that trees seems to die as they pass it. In fact, every black person I know wants to be more like republicans but always vote democrats. The truth is it's not just black people, everyone wants to be rich and own businesses. The vast majority won't make it there so they'll vote for what gives them the most benefits. Being poor or just average, the democratic party will give you more benefits and therefore win your vote.

If you don't remember history, the democratic party was the fiscally responsible one. However, that wasn't popular back then so they aimed to get more votes by being friendly with poor people. They did just that and thus the 2 parties' platforms did a switch. This started in the 1950s.


RE: He is right....
By AlphaVirus on 6/27/2013 11:51:11 AM , Rating: 3
quote:
For example, I know plenty of black people who bought low mileage big vehicles that trees seems to die as they pass it. In fact, every black person I know wants to be more like republicans but always vote democrats. The truth is it's not just black people, everyone wants to be rich and own businesses.


This paragraph makes me cringe.


RE: He is right....
By Reclaimer77 on 6/27/2013 2:15:27 PM , Rating: 3
Yeah his entire post was a bit w-t-f moment for me as well.

He accuses me of using a "stereotype", and immediately stereotypes "black people". I mean I'm not saying he's racist, I hate people who make blanket accusations, but did he really need to go there to make his point?


RE: He is right....
By ClownPuncher on 6/27/2013 2:21:47 PM , Rating: 2
They keep the demand for watermelon high, yet the prices remain low.

Wait, what the hell is anyone doing even responding to that guy?


RE: He is right....
By freedom4556 on 6/27/2013 3:30:52 PM , Rating: 2
Since we're blowing stereotypes out our ass anyway...

I went to my local (rural Ark.) Dodge dealership to test drive a V8 Challenger about 6 months ago (couldn't afford one, but wanted to try it out anyway), and you know what I discovered? He didn't have one. He had six V6 Challengers and serval V8 Chargers, but by and large the lot was Ram trucks. Probably 50-75 trucks and maybe less than 20 cars. Same story at the Chevy dealer next door. Round here it's not just the black people in the Escalades with 20" chromes, but everybody.


RE: He is right....
By Spuke on 6/27/2013 5:11:48 PM , Rating: 2
quote:
For example, I know plenty of black people who bought low mileage big vehicles that trees seems to die as they pass it. In fact, every black person I know wants to be more like republicans but always vote democrats. The truth is it's not just black people, everyone wants to be rich and own businesses.
LMAO!!! I'm thinking BRB's got two persons living within himself. A black rapper and an Asian dude.


RE: He is right....
By spamreader1 on 6/28/2013 8:04:28 AM , Rating: 3
It must be hard trying to be a liberal conservative.

If I'm not mistaken the Original Democrat party was huge on taking from others and giving to the Union, especially farmers (the poor) who were recognized as the Unions backbone. But this was through the idea of growth through expansion, not unlike the same time period expansions of the European empires of the time. The early history of the party advocated Manifest Destiny and opposed centralized banking, which was allowing currency to have wildly different values between transactions with little common basis in (at the time) gold or silver standard.

I can't say that either party have ever been a truly fiscally responsible one. The early Republican party was keen on higher tariffs, and running a larger national debt, as well as government aid to expanding economic infrastructure, both agriculturally and industrially.

One of the few things that hasn't changed much is that the Republican party is still viewed as a more or less pietistic Christian Party, where the Democratic Party seems to be less and less concerned with religious piety at all.

And to be fair the current Conservative view might be more of, if I can afford it, I should be able to buy and use whatever I desire. If I can't afford it, I'm not that worried about it anyway, or I can wait until I can afford it.

Where a slight adjustment to the current Liberal view might be if I can't afford it, and feel I'm entitled to it, I should regulate it and disperse it so that everyone can enjoy the regulated product now, even if it's not quite what everyone else wants.


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