Eco-Advantage Blog

June 28, 2007 | Andrew Winston | Jump to: Comments (0) | Post A Comment

"Detroit Blinked" (A Little Late)

[Originally posted here, on June 21, 2007]

The New York Times reported today that after many years of fighting it, the auto giants are finally asking for an increase in the average fuel economy of their fleets (or the CAFE standard). Of course, it wasn’t all that voluntary. As the article reported…

“Longtime backers in Washington…made it clear that the political climate had changed”

Basically the Michigan delegation told Detroit to accept the winds of change and try to work productively toward regulations they could live with, rather than face the more aggressive bills moving through Congress. But the goals being talked about are in the range of 35 mpg average for cars and trucks by 2020. Besides the fact that many other countries have higher numbers, a few things about this whole story are fairly amusing.

First, Detroit is still complaining that getting there will cost many billions of dollars. But a chart in the same article shows the fuel efficiency of various automakers’ fleets. So getting to 35 in 13 years is too hard and expensive? Toyota’s car fleet is at 34.7 today (vs. Ford at 28.2 and GM at 29.2). By the way, I continue to be mystified by Toyota’s position on this which is mostly siding with Detroit (previous post here).

Second, we’re debating getting to 35 in years (and another bill gets us to 36 by 2022), when by all indications the risk of climate change will force us to go much faster. These low targets won’t really help us move the needle enough. I think I hear the sound of Nero fiddling away.

The political battle is interesting, but this will all be moot. As oil prices continue to rise (which is very likely over this same 10-15 year period), and perhaps by a lot, consumers will demand much more efficient cars. Not to mention the entirely new options, like plug-in hybrids and all-electrics on the near horizon. The companies that satisfy these needs will make a ton of money. Basically events (and green market dynamics) are overtaking this debate faster than Tesla’s electric roadster zipping past Porsches in zero to sixty tests (yes, an electric car is the fastest around).

So when will we hear an automaker say something like, “thirty-five, shmirty-five…we’re going to shoot for 60 mpg in 10 years”? I have this sneaking suspicion that some of the leaders are saying it, just not in so many words. Toyota recently said its fleet will be 100% hybrid by 2020.

The competition is moving so fast, Detroit might blink and miss it.


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