Experts disagreed last week on the long-term outcome of the government's recent 54.5mpg rule, with consumer advocates hailing the new mandate, and engineering consultants warning that it would send costs skyrocketing.
"Not only will consumers, currently being killed by high gas prices that will continue to rise, benefit financially, but this standard will dramatically reduce our dependence on foreign oil," Jack Gillis, director of public affairs for the Consumer Federation of America, wrote in an email to Design News. "That alone is something our surveys show consumers care deeply about, and it will have very positive political ramifications in the US."
The Center for Automotive Research (CAR) contends that as fuel efficiency rises to very high levels, the benefit to the customer shrinks. At $5 per gallon, for example, a 15,000-mile-a-year driver can save $3,750 on gasoline annually by jumping from 10mpg to 20mpg. But by going from 40mpg to 50mpg, the savings drop to only $375 annually, the curve shows. As consumers reach those limits, CAR says they are likely to keep their current vehicles longer, a phenomenon it refers to as the "Cuban-ization" of the American auto market. (Source: Center for Automotive Research)
Gillis's position was echoed by numerous other consumer advocates, as well as by Design News readers, many of whom contended that even if the new rule is eventually abandoned, it will still push automakers to find new ways of squeezing more miles out of their vehicles. "I fully expect that this is too ambitious a goal and the government will eventually have to backpedal," reader Scott Orlosky wrote on our Website, "but we will ultimately end up with cars that make more efficient use of a gallon of gasoline."
Automotive engineering consultants were not enamored with the new rule, however. Two who talked to Design News argued that the mandate would add far more cost to each vehicle than the often-quoted government figure of $2,800. The Center for Automotive Research (CAR) cited its study showing that the 54.5mpg technology could add as much as $11,000 per vehicle. Scenaria Inc., a consulting firm specializing in the study of technology investment decisions, contended that the figure would minimally reach $5,000 per vehicle, and might hit more than $8,000 on many models.
Sandy Stojkovski, president of Scenaria, told Design News that the government's $2,800 figure is an erroneous interpretation of its own numbers because it includes only 2017 to 2025 increases, and leaves off an additional $2,000-per-vehicle that automakers will have to lay out between now and 2016, when the 35.5mpg ruling kicks in. "When you add it up, you're already at $2,000 to begin with," she said. "Then, even by the government's own estimate, you're going to add $2,800 to that. And that's still less than it will actually come out to."
That makes sense, Chuck. But with the limited sales of hybrids and EVs, most of the CAFE gains will come from traditional engines. Wouldn't most of the gains on those engines involve upfront innovation rather than the incremental costs of parts? Or, is there something intrinsically more expensive about the parts that would be needed for a high-efficiency vehicle?
You raise a lot of good points, Beth, particularly with regard to the added cost of entertainment centers. The big problem, though, is achieving that last 10 mpg. That's where most of the cost lies. It's worth it to take a hard look at the accompanying graph. It seems counter-intuitive at first, but a consumer saves ten times more in fuel costs by going from 10 to 20 mpg, than by going from 40 to 50 mpg. Going from 40 to 50 pg, a 15,000-mile-a-year driver paying $5 a gallon saves only $375 annually. The point is, we reach a mathematical limit as we go farther out on the curve. Unfortunately, most of the additional vehicle cost is in that last 10 mpg, the experts say.
Most of the upfront costs -- such as product development, engineering, tools and production equipment -- will diminish, Rob. Parts and labor will remain, however. It's particularly problematic in big ticket items, such as the dual powertrains in hybrid vehicles. Two powertrains will always cost more than one.
Nice to hear the voices of both consumer advocates and engineers, Chuck. As for the costs to gain fuel efficiency, are some of the costs one-time costs for innovation and altered design? I would think that many of the improvements would not continue to add cost with each individual car after a certain pay-back period.
I think I have to side with the consumer advocates on this one. Granted, it will take some extra engineering and innovation muscle, but much of this technology should have been (and has been) in the works for years given that it is no surprise that the mandate was coming. As for the added cost, what about the addition of bluetooth, entertainment centers, GPS, automated driving systems--all of those highly complex embedded systems and electronics jack up the cost of the vehicle and consumers buck up and pay extra for the technology. I just see this as a standard that pushes progresss. What's so bad about that?
Tesla Motors plans to roll out a “compelling, affordable electric car” that will sell for about half the price of its high-profile Model S by the end of 2016, company chairman Elon Musk said last week.
From Dell / Intel® New Paradigms in Design Work Scott Hamilton, vertical market strategist for Dell Precision workstations, 5/2/2013 5
Early in my career, I worked as a draftsman and remember the days of drawing on vellum with numbered pencils and Mylar with plastic lead. This was a fun experience in the sense that I ...
I've been using workstations for more than 10 years and love finding ways to get more performance from my system. With demanding professional applications that require more power each ...
A lasting memory from my first job as an engineer in an auto assembly plant is standing on hard concrete at six in the morning, vending-machine coffee clutched in hand, listening to ...
For industrial control applications, or even a simple assembly line, that machine can go almost 24/7 without a break. But what happens when the task is a little more complex? That’s where the “smart” machine would come in. The smart machine is one that has some simple (or complex in some cases) processing capability to be able to adapt to changing conditions. Such machines are suited for a host of applications, including automotive, aerospace, defense, medical, computers and electronics, telecommunications, consumer goods, and so on. This radio show will show what’s possible with smart machines, and what tradeoffs need to be made to implement such a solution.
To save this item to your list of favorite Design News content so you can find it later in your Profile page, click the "Save It" button next to the item.
If you found this interesting or useful, please use the links to the services below to share it with other readers. You will need a free account with each service to share an item via that service.
Tweet This
1 
