Automakers and regulators differ on what it will take to reach the fuel economy target, said an expert at the Advanced Design & Manufacturing conference.

Charles Murray

April 4, 2017

4 Min Read
Auto Expert: Get Ready for the 54.5-MPG Debate

Automakers and government regulators have begun bracing for a contentious, year-long debate that will set the course for the future of the auto industry, an expert told attendees at the Advanced Design & Manufacturing conference in Cleveland last week.

Brett Smith, a program director at the Center for Automotive Research, said the two sides remain far apart on the viability of a plan that calls for automakers to achieve an average fuel economy of 54.5 mpg across their fleets by 2025.

Automakers are worried, and German luxury car manufacturers in particular are “freaking out” about the proposed 54.5-mpg regulation, said Brett Smith of the Center for Automotive Research. (Source: Design News)

“It’s a big disagreement,” Smith said at a technical session titled, Regulatory Updates on NHTSA's 54.5-MPG CAFE Mandate. “The regulators are saying the standards can be met with more efficient gasoline engines. And industry is saying, ‘The technology has been pulled forward faster than anyone anticipated, and we’re still nowhere near meeting the standard.’”

The two sides will need to reach an agreement by April 1, 2018 – the final date agreed upon for a mid-term evaluation of the 54.5-mpg regulation. The stakes are high for both sides. Government agencies – including the Environmental Protection Agency (EPA), National Highway Traffic Safety Administration (NHTSA), and the California Air Resources Board (CARB) – want to reduce greenhouse gas emissions and combat climate change.

Automakers, meanwhile, contend the regulation would cost them hundreds of billions of dollars and possibly lead to the loss of up to 1.1 million American jobs due to reduced vehicle sales.

Smith, who does not represent either side, agreed that the fuel economy target represents a big challenge for automakers. “The automakers are worried,” he said. “The German luxury car manufacturers are freaking out.”

German luxury car makers, such as Mercedes-Benz and BMW, typically load their vehicles with extra features that burn more fuel. Moreover, those cars are heavier and, by their nature, use more powerful drive trains, making it much harder to reach the proposed targets.

Still, government regulators estimate that manufacturers could hit the 2025 targets with fleets that include about 3% hybrids and 4% EVs and plug-ins, Smith said. Automakers argue that they would need about five times that many – approximately 35% hybrids and EVs, he added.

The biggest sticking point, however, is the fact that that pure EVs and plug-ins still don’t sell well enough to make the regulations economically viable, Smith said. “As we’ve gotten more choices from 2011 to 2016, we’ve seen more cool powertrain technologies out there – hybrids, electric vehicles and PHEVs,” he said. “But the sales aren’t going up very fast. We’ve hit an electrification stall-point of about 3-4%.”

Industry analysts will watch carefully to see how well the new breed of $30,000, 200-mile electric cars do in the market, Smith added. “The next frontier is the Chevrolet Bolt,” he told the audience. “But the Bolt is really struggling in the market, even though it’s a great product.”

Smith expects the complaints of automakers to draw little sympathy from regulators, however. Too often, automakers have misrepresented their situations, especially with regard to fuel economy labeling, he said. He cited incidents with General Motors, Ford, Mitsubishi and, most notably, Volkswagen.

“The industry has lost its credibility,” he said. “You can’t build trust in the negotiations that way. If you’re the EPA, and you see this happen repeatedly, you start to become less willing to cooperate.”

The wild card in the regulatory negotiations is the recent election of President Donald Trump, Smith said. The Trump Administration has already called for a freeze on regulatory activity, and it’s not known how that will affect the regulation. Also, the appointment of a new Supreme Court Justice could affect the Clean Air Act, which is a cornerstone of California’s clean air laws.

“It’s almost impossible to predict what will happen now, but under the current administration, there’s a pretty strong likelihood the regulations could get relaxed,” Smith told Design News. “But I don’t think it would ever get eliminated.”

Senior technical editor Chuck Murray has been writing about technology for 33 years. He joined Design News in 1987, and has covered electronics, automation, fluid power, and autos.

About the Author(s)

Charles Murray

Charles Murray is a former Design News editor and author of the book, Long Hard Road: The Lithium-Ion Battery and the Electric Car, published by Purdue University Press. He previously served as a DN editor from 1987 to 2000, then returned to the magazine as a senior editor in 2005. A former editor with Semiconductor International and later with EE Times, he has followed the auto industry’s adoption of electric vehicle technology since 1988 and has written extensively about embedded processing and medical electronics. He was a winner of the Jesse H. Neal Award for his story, “The Making of a Medical Miracle,” about implantable defibrillators. He is also the author of the book, The Supermen: The Story of Seymour Cray and the Technical Wizards Behind the Supercomputer, published by John Wiley & Sons in 1997. Murray’s electronics coverage has frequently appeared in the Chicago Tribune and in Popular Science. He holds a BS in engineering from the University of Illinois at Chicago.

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