New Fuel Efficiency Standards Proposed, What Happens Next

Tuesday, the Department of Transportation officially proposed an increase in fuel economy by 25% with a 2015 deadline. The increase would be 4.5% each year over a five-year period, starting in 2010. That would move the current 27.5 mpg standard for passenger cars to 35.7 mpg, and move trucks from 23.5 mpg to 28.6 mpg. By 2020, the number would have to be 35 mpg combined fuel efficiency for cars and trucks.

In 2007, the fleet fuel economy average for cars was 31.0 mpg, while trucks came in behind the regulated level at 22.9 mpg.

Automakers are saying to reach these new goals they need to spend a lot of money on technology, a cost that will be passed on to the consumers. We thought there was another way to reach the goals.

Sell fewer inefficient vehicles.

Not only is the solution simple, it’s playing itself out in the current marketplace. That’s what everyone wants, right? Fewer trucks on the road, more Smart cars in the driveway?

The only problem is that with the way the government figures the Corporate Average Fuel Economy numbers even if a company sold 30% fewer trucks, their CAFE number would stay exactly the same.

So automakers really will need to technically enhance each car and truck to meet the new standards. Will car buyers need to pay more for that technology?

Not really. What we see happening is more conversion of truck-based SUVs to unibody crossovers, such as the rumored plan for Ford’s next generation Explorer. Large, truck-based SUVs may be forced to switch to diesel engines, something that light-duty pickups could also do.

Cars would be less affected since they’re already closer to the 2015 number than trucks are. Still, expect to see cylinder-deactivation become more common, as well as more turbo-charged six-cylinder engines instead of thirstier V-8s. This is already happening in Honda’s lineup and future Fords, respectively, with no inkling that either company is looking to bump those MSRPs.

Add new hybrids into the mix, and whatever alternative technology that happens between today and 2015, and there shouldn’t be a real problem for cars to advance in much the same way they already have been without costing consumers. It’s the trucks that will face the real challenge.