Fuel Efficiency Outlook Scary
By Dennis DesRosiers
(WINDSOR, ON) – We updated our fuel efficiency merge and here are some preliminary results and they are scary indeed VERY scary.
Fuel efficiency in 1982 was 11.6 liters per 100 kilometres …. 28 years later fuel efficiency has improved to 9.25 liters per 100 kilometres an improvement of 20 percent over that timeframe. Why is this scary? Because the new Obama standard calls for all vehicles to meet a 6.63 liters per 100 kilometres standard by 2016 and Ottawa is likely to match this standard and force it into the Canadian market.
Now I ask you … “ if we have improved fuel efficiency by only 20 percent over 28 years ( and there was a lot of low hanging fruit to be picked during that timeframe ) how in the heck are we to improve fuel efficiency by another 28 percent in 7 years ( now six years )?” It ain’t going to happen.com.
Even a rapid introduction of hybrid vehicles ( largely rejected so far by consumers) and plug in electric vehicles (market acceptance totally uncertain) isn’t going to get the industry to this new standard in the time allotted … impossible. Import passenger cars are only 14 percent away from meeting the new standard but Detroit-3 light trucks are still 43 percent from the goal and import light trucks some 36 percent away from the target. I suppose an OEM could just not offer for sale the least fuel efficient vehicles but that would mean that over 80 percent of the current vehicles in dealers lots would no longer be offered. That isn’t going to happen either. So this new Fuel Efficiency Standard is bound to fail .. pure and simple.
Why you say? Well with CAC emission standards the OEM was almost entirely in control as to how to meet these standards and they eliminated 99.6 percent of CAC’s from vehicles using advanced technology. All vehicles today meet the current very strict CAC standard.
With fuel efficiency the OEMs actually have a much smaller role in meeting the standard. You see most full line OEMs have vehicles that meet the standard or will meet the standard by 2016. But it is the consumer that chooses which vehicle to buy NOT the OEM or their dealers. And consumers for the most part are NOT embracing higher fuel standards even with higher gas prices … they still buy the vehicle they want rather than the vehicle some politician wants them to purchase and their vehicle of choice doesn’t meet the new Standard. And more importantly there is very little the OEMs can do to make them purchase more fuel efficient vehicles.
The OEMs have an important role in meeting fuel efficiency standards and are fulfilling this role by introducing dozens and dozens of innovations on their vehicles that incrementally will move the needle. And indeed the needle did move quite a bit over the last few years. But it will be near impossible for the OEMs to meet these new standards unless consumers change their buying patterns and there isn’t a lot of evidence of that happening. And you can pretty well be guaranteed that no politician is going to slap a higher tax on gasoline or force certain vehicles to no longer be sold.
So the industry is heading towards a stalemate where higher standards are imposed and then NOT met. Then the politicians will have a difficult choice … loosen the Standard or impose fines on a fragile industry … I suspect they will choose to push the standard further and further into the future. Why not set a realistic standard with a realistic timeframe to meet the standard and then let the industry get on with doing their job?
Note: This is information is based on vehicle on the road data NOT new vehicle sales data but it is a very close proxy for what is actually being sold. If there is an error it is in older vehicles since the most fuel efficient vehicles are scrapped at a higher rate than the least fuel efficient vehicles. So our data would should BETTER fuel efficiency for older vehicles than what was actually purchased at the time.