The road to a stronger CAFE standard

The Big Three and Toyota are already busy trying to map out strategies for a 35-mpg world. That includes everything from hybrids to plug-ins to clean diesel engines and smaller gas engines that boost fuel economy without sacrificing power. GM and Chrysler are in the process of rolling out a two-mode hybrid system they developed with BMW for pickup trucks and full-size SUVs such as the Chevy Tahoe and Chrysler Aspen. But the technology adds more than $10,000 to the cost of each vehicle, and still only boosts fuel economy to a highway/city average of 22 mpg. Despite advances in engine technology, there just isn't anything else on the horizon that will push pickups and large SUVs beyond 25 mpg, and even that comes at great cost. At GM, Lutz expects that costly gas-electric hybrids will have to make up 80% of the lineup by 2020 to hit the standard. In the meantime, the company is exploring other options: offering a smaller, four-cylinder engine in its forthcoming Camaro muscle car and eliminating altogether some of the gas-guzzler sedans on its drawing board. Ford is readying a new family of gas engines that will improve fuel economy between 10% and 20% compared with the engines they replace.

GM's Lutz, a longtime lover and developer of performance cars and big trucks, believes the plug-in application, even with high initial costs, will carry the most interest for consumers in a new era of fuel economy consciousness. Also, GM and other plug-in developers such as Toyota are betting that the cost of electric recharging will stay well below the cost of gasoline. "I'd much rather respond to the consumer than a regulation," says GM's Lutz.

But even the plug-ins Lutz is championing could face resistance in the marketplace because of price. GM's Chevy Volt, first unveiled as a concept in January, 2007, can go 40 to 50 miles on a single charge of a lithium ion battery, and then a gas motor kicks in to move the car and recharge the battery at once. The company once targeted $30,000 as the price for a Chevy Volt. But the cost of developing the technology is making that an unreachable dream. Lutz now figures a more realistic price for the Volt would be about $48,000. He reckons that $40,000 might be possible, without making any profit. Only government tax incentives could take the price tag nearer to $30,000.

Story continues below ↓

Premium problem
It hardly seems fair to Detroit to compare its efforts in the hybrid arena to Toyota's. Chrysler's Press says when he was at Toyota, "the Japanese government paid for 100% of the development of the battery and hybrid system that went into the Toyota Prius."

Whether they like it or not, the new 35-mpg standard should nudge Detroit's Big Three to become more aggressive in pursuing green technologies. But the question remains: Will Americans be willing to pay thousands of dollars extra for these cars? Consider, for example, that Honda scrapped the hybrid version of its Accord because it didn't offer enough fuel savings to justify the premium price that had to be charged for the technology. Similarly, sales of the big hybrid SUVs from GM and Chrysler aren't expected to make much of a dent, perhaps just 5,000 or 6,000 per year, because of their high costs.

If U.S. politicians were really serious about improving fuel efficiency, they might follow Europe's example. Thanks to steep excise taxes, prices at the pump in some European countries now top $7 a gallon. That's helped drive demand for smaller, more fuel-efficient vehicles over the long term. But the conventional wisdom is that in America, where driving a car, as well as a pickup and SUV, is seen as an inalienable right, a gas tax, which consumers are reminded of every time they visit the pump, would never fly. Says Chrysler CEO Robert Nardelli: "That, of course, is political suicide."

< Prev | 1 | 2

Discuss Story On Newsvine
Rate Story:
View popularLowHigh
Email
Instant Message
Print