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