Strict new federal fuel-economy and carbon-emission standards made final Tuesday are the biggest technological challenge to the auto industry since the government began regulating emissions in 1970 and mileage in 1975.
According to a report by USA Today, the rule sets the equivalent of 54.5 miles per gallon as the average the auto industry must achieve by 2025, up from 29.7 mpg now and 35.5 mpg in 2016.
The tough “CAFE” standard (for corporate average fuel economy), which was to be announced earlier this month, was announced Tuesday by the Obama administration on the day that Republicans’ national convention got underway in Tampa.
It is “a monumental day for the American people,” Transportation Secretary Ray LaHood said in announcing the final rules.
And it’s the script for a likewise monumental change in the cars and trucks Americans drive. The vehicles will undergo more urgent evolution of current trends so that, in a decade or so, the American streetscape could resemble science fiction, including:
• More gas-electric hybrids and plug-in hybrids. More electric cars. A few that run on natural gas. Maybe a few more hydrogen-fueled cars.
• Smaller cars powered by smaller gasoline engines, most using turbochargers to get back the power they lose as they give up size.
• Dashboards that resemble video games, giving you colorful “atta-boys” when you drive with a light foot.
• More parts made from composites and high-price aluminum, titanium and high-strength steel — metals which have the additional hidden cost of wearing out fabrication equipment in auto assembly plants faster than conventional steel.
• Oval car bodies to slice the air. Sophisticated, many-speed transmissions and CVTs (continuously variable automatic transmissions) that can keep the engines running in their sweet spots where they make the most power on the least fuel.
Will car buyers embrace the new vehicles? “The risk is pushing technological demands beyond the automakers’ ability to deliver. The smarter way to approach it is to let the market guide vehicle fuel-efficiency standards,” says Jeremy Anwyl, vice chairman at auto-shopping site Edmunds.com.
Trucks get an early break
According to USA Today, Environmental Protection Agency Administrator Lisa Jackson said trucks get a break initially because they often are work or tow vehicles that need bigger, more fuel-thirsty engines and will be harder to turn into high-mpg vehicles. “Cars are ramping down faster than trucks, and they catch each other at the end,” she said.
Automakers, through their lobby group Alliance of Automobile Manufacturers, had signed on to back the new regulation, and said Tuesday: “After years of billion-dollar investments by automakers, consumers have a lot of choice in fuel-efficient cars and light trucks, and automakers are working to sell these high-mileage vehicles in high volumes.”
The Alliance statement added, “Compliance with higher fuel-economy standards is based on sales,” drawing a distinction between what buyers will accept and what automakers might be forced to build to meet the tighter regulations.
The final rule directs the government to review progress in five years. It then could revise the regulations, if necessary. “Automakers will be looking for a rigorous midterm review with periodic check-ins since it is difficult to predict three years in advance, let alone 13 years,” the Alliance said.
In another “extra credit” feature of the rule, vehicles that burn natural gas or are powered by electricity are counted more heavily in calculating compliance with the rule than are conventional gasoline-powered vehicles that hit the targets.
Diesels, though more fuel-efficient by nature, however, get no extra credit in the regs. Alliance members VW and Mercedes-Benz, both backers of diesel power, have objected to the rule for that reason.
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An unusual pairing of major auto makers is seeking to develop a gas-electric hybrid system for light trucks and sport-utility vehicles, a move to share the cost of new technology as both work to achieve the latest U.S. fuel-economy targets set by the Obama administration.
As reported by the Wall Street Journal, Ford Motor Co. and Toyota Motor Corp. on Monday signed a memorandum of understanding on the collaboration, with a formal agreement expected to be signed next year. If an agreement is reached, Ford and Toyota would co-develop a hybrid powertrain system for larger, rear-wheel-drive vehicles such as big pickup trucks and SUVs.
Both companies already have hybrid systems that power front-wheel-drive passenger cars such as the Ford Fusion and the Toyota Prius, the top-selling hybrid in the U.S.
The Obama administration’s new fuel-economy requirements—known as the corporate average fuel economy, or CAFE—call for auto makers to produce a fleet of vehicles that averages 54.5 miles a gallon by 2025, from the current level of 27.6 miles a gallon. Under the administration’s plan, auto makers that offer hybrid pickup trucks can earn credits that make it easier for them to reach the higher target.
“Why now and why these companies is a reflection of the way CAFE standards are heading,” Barclays Capital analyst Brian Johnson said in an interview. “The simultaneous regulatory requirements to cut emissions, combined with the need to keep capital expenditures in line, means engineering is now getting ahead of company egos. We will see more of these partnerships in the future.”
WSJ reported that Ford and Toyota need to move quickly to develop fuel-saving technology for larger vehicles. General Motors Co. already has hybrid cars and a hybrid version of its full-size trucks on the market. It pushed the administration to allow credits for hybrid trucks, according to people familiar with the matter.
“The [Environmental Protection Agency] requirements are a big challenge for us auto makers,” Toyota research and development chief Takeshi Uchiyamada said during a news conference at Ford’s headquarters. “American society can’t do without trucks and SUVs. This collaboration we are forming with Ford is not only about lowering carbon dioxide but making trucks and SUVs more affordable for the customer.”
Toyota initially resisted the Obama administration’s new fuel-economy and emissions requirements, the people familiar said. The company argued that exceptions for full-size trucks benefited Detroit auto makers, they said. Toyota later supported the administration’s move to raise the standards.
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The federal government wants pickup truck manufacturers to introduce “game changing” technologies that help reduce greenhouse gas emissions, including hybrid technology, according to a proposal from the Environmental Protection Agency (EPA). And it wants to see it happen soon.
As reported by Pickuptrucks.com, under the proposal, manufacturers could get per-vehicle credits toward their corporate average fuel economy (CAFE) if they use “significant quantities” of hybrid technology on full-size pickups, starting in 2017.
What’s surprising is how fast the government wants to act. To be eligible for the credits, a truck manufacturer must use the technology on a minimum percentage of its full-size pickup production — 30% in 2017 and rising to at least 80% in 2021 for what the EPA calls “a mild HEV pickup truck.” Given that the Chevrolet Silverado 1500 Hybrid and the GMC Sierra 1500 Hybrid make up a small portion of pickup truck sales right now, it’s hard to imagine similar vehicles would make up 30% of a fleet in six years, let alone 80% in 10 years.
Pickuptrucks.com said that stop/start systems, regenerative braking, minimum battery voltage value and minimum energy storage capacity were among the technologies outlined in the proposal. The proposal also mentions that the government intends to offer a performance-based incentive credit for full-size pickups that significantly reduce emission below the CAFE target.
The proposal is part of an effort by the EPA and the National Highway Traffic Safety Administration to reduce fuel consumption and tailpipe emissions for the 2017-25 model years. The agencies want set up a national program to cut greenhouse gases by 2 billion metric tons and save about 4 billion barrels over the course of those models. President Barack Obama already announced tough new fuel-economy standards that will increase the corporate average fuel economy in the U.S. to 54.5 mpg for cars and light trucks built between 2017 and 2025.
The proposal is expected to be formally issued by the end of next month, and a formal ruling is expected by July 31, 2012.