WestSideBilly

January 30, 2002

Two Senate committees are expected to approve a boost in fuel efficiency requirements for U.S. vehicles, Reuters reports.

The provisions would be added to a comprehensive energy bill that is now moving through Congress.

The exact numbers the Senate may demand are unknown as yet but a draft copy of the energy bill circulated last month, calling for increasing the fuel efficiency in cars built between the years 2007 and 2010 to 36 miles per gallon, while raising it to 27.5 mpg for light trucks. The current Corporate Average Fuel Economy (CAFE) standards require passenger cars to average 27.5 mpg and light trucks to get 20.7 mpg.

For years the Big Three U.S. automakers have opposed any increase in the federal fuel-economy standards. Now their strategy has changed somewhat, The Wall Street Journal said.
The automakers are "trumpeting a futuristic technological crusade they hope will earn them green points [and] are still trying to maneuver, if no longer to block a CAFE increase, at least to structure it so it hurts them less and their Japanese competitors more," the WSJ reported.

The Big Three are worried that if the CAFE standard is raised they will have to spend big dollars to redesign their trucks to make them more fuel-efficient, while the Japanese could grab more U.S. market share with their products. They've also expressed concern that higher fuel efficiency requirements would force them to make vehicles that are more expensive and lighter, and thus possibly less safe.

But the automakers once united front is cracking. Honda has said the fuel economy of vehicles could be improved in an affordable way without compromising safety.

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Not really new news, but since the standards are buried in a another bill they have a better chance of getting through. Also interesting is the comment regarding Honda's stance on things (not surprising given their very promising IMA technology).

speed4tu

That is stupid. A car that averages 36 mpg is not going have much more power than a bycycle! They should just let the consumer decide how much gas they want to burn.

cdelena

[QUOTE]Originally posted by ugotmade
[B]That is stupid.

cthree

I disagree. People would just spend more on gas than they do now. SUV sales weren't lagging while gas was peaking over $2/gallon. The guzzler tax (this is what we are talking about) is in place now and people are paying it. Taxing gasoline penalizes those with a high total consumption rather than high spot consumption. By that I mean someone with a fuel efficient car that travels 50 miles to work will pay the same tax as someone with a guzzler getting half the mileage and travelling half as far.

Inefficient cars should IMO be penalized on registration just like dirty ones. Owning a guzzler should cost money to own, not just drive. There are better ways to get to the mall than in your Expedition. It's the desirability of big cars with big engines that need to be changed. The guzzler tax right now is just a one-time hit that gets lumped in with a very expensive purchase. It's hardly noticeable on a $40K SUV.

If the EPA slapped the guzzler tax on annual registration fees then it would be a different and much more noticeable charge. Burying it in the cost of gasoline is not the answer. Slap it on the bill and make it a line item so people can see what it's costing them to own that pig. Next time they go car shopping they might just think about a more efficient car. If it cost $800/yr more to register a V8 Suburban than a rated vehicle then people might take notice.

When you bury taxes in the price of a commodity like gasoline your are just making the price higher. People don't know why it's higher it just is. Out of sight, out of mind. People need to change their habits and big guzzling cars and trucks is a habit people need to break. Unlike cigarettes where only smokers get hit with the tax, everyone who drives uses gasoline and thus pays the tax.

cdelena

[QUOTE]Originally posted by cthree
[B]

I disagree. People would just spend more on gas than they do now.

Mikey

Average fuel economy of US vehicles has actually gotten worse in the last 10 years, how ridiculous is that?

If I have to choose between higher CAFE standards (gas guzzler taxes), MUCH higher taxes on fuel, or more pollution with the present system, I choose higher CAFE standards.

I think the CAFE system is a Lot more viable than the European system of taxing the hell out of gasoline. Taxing gas raises prices on all consumer goods, the CAFE system just "strongly suggests" you don't buy an SUV or big truck unless you have a real need for one. And hating SUV's as I do, higher CAFE is never a bad thing.

David

These were my conclusions after reviewing the extensive literature on CAF

WestSideBilly

Tons of good info:

http://www.nhtsa.dot.gov/cars/problems/stu...econ/index.html

Not sure what decides whether it is an import or domestic - final build location? Or is it percentage of parts content? Look at the fines! $5.50/tenth, times the vehicles sold. 99 fines:
BMW $13,147,249.50
MB $8,141,430.00
Porsche $4,884,627.00

Figure $150 of the price of a new beemer goes to paying the CAFE fine.

David

Parts content: >75%

Yes the fines are hefty but the way the law is written these manufacturers won't end up paying it because you can save up credits for several years and allocate your fines to those years. You can also do the reverse as well. If those manufacturers actually had to pay those fines every year, I think the mix of the sales fleet would change. The only manufacturers that actually pay are the niche players, like Jaguar, Ferrari, and Porsche, etc.

Mikey

$13 Million for all of BMW's imports for a whole year? That's peanuts to them, even if they had to pay those fines they'd just build them into the cost of every car. No one balks at $150 on a $40,000 car.

David, There is no doubt in my mind that Massive gasoline taxes would effect a change in the buying habits of American consumers. But we're talking about MASSIVE 300% to 500% increases before gas prices would even approach the European standard (ugh).

In the US, raising taxes minimally is politically untennable, but massively raising taxes on a product that is in the face of consumers every day is political suicide. Predict this to happen, never.

Taxing sins or the rich has always been fair game, so we have the CAFE (gas guzzler) standards. I think they should raise CAFE by 1% to 2% a year, every year. Pretty soon, every car would be made of Aluminium or Carbon Fiber, woo-hoo!