The tougher U.S. fuel economy (CAFE) standards have forced some radical rethinking by two of the world’s largest auto companies.
They really have no other choice, as long as the government commits to the flawed idea of CAFE, with all its loopholes, contradictions and costs of enforcement.
The 54.5-mpg requirement for passenger cars by 2025 (really around 40 mpg per EPA window sticker) has forced Chrysler to start making and selling hybrids and diesels. In 2013, the Chrysler 300 (above) will have a hybrid version, and the Jeep Grand Cherokee will offer diesel. The Fiat 500 EV will be coming next year.
Last year, Chrysler trailed all 14 major carmakers with a 19.2-mpg average. Regarding CAFE, CEO Sergio Marchionne has said, “I have no other way of getting to 2025 numbers than by going to hybrids.” He is also hopeful that CNG infrastructure will take hold.
Nissan has laid out a bunch of very ambitious goals in its Green Program 2016 and in CEO Carlos Ghosn’s often-quoted prediction that electric cars will achieve 10 percent of the market by 2020. By 2016 Ghosn expects to sell 1.5 million zero-emissions and hybrid cars, with a 35 percent increase in CAFE numbers compared to 2005 levels.
So Sergio, who has said he hates hybrids (too expensive to produce and very low sales), will be forced to spend billions producing them. Carlos puts a better face on it and proclaims impossible numbers, which Nissan will achieve in part by creating two new hybrids, one a plug-in.
Both these guys are smart men, and both know that CAFE standards are much more costly (2-3 times) than a gas tax, which would focus on the demand side (consumption) rather than the supply side (carmakers).
But achieving a gas tax is a political impossibility, as neither side of Congress will even discuss it. The media won’t discuss it because it’s a political no-no, and the public won’t discuss it because it prefers to keep the costs hidden by paying the enormous price of subsidizing gas and oil.
There’s a lengthy, revealing and accurate history of our energy delusions here, which I recommend to all of you. The geopolitics of oil are troubling and fascinating. They begin, incidentally, with Maommar al-Qaddafi, the Libyan leader just assassinated, who brought Middle East oil and OPEC to power.
Our “addiction to oil” can be summed up in our refusal as a people to pay the true price of the fuel we use. Chrysler and Nissan are just pawns in this game.
Will the new fuel economy standards work to reduce consumption? Will they be enforceable?