ABG: How much will the EPA's new fuel economy standards cost each automaker?

Don't worry about it. The Republicans have already promised to repeal better fuel economy standards. It is bad for the profits of Big Oil companies. If profits go down, the Big Tax Breaks given by the GOP will be less effective at increasing the national debt.

 

The price increase per car that the EPA estimates is to improve mpg in the gas guzzlers a little. The calculation only holds if the fleet mix stays the same.

 

How does this "cost" automakers anything? they will just pass any additional cost to the customer, who is the one who will benefit from reduced fuel costs. this seems like a non-story...

 

But if the rule applies to everyone then it's a level playing field. If it "costs" GM twice as much to meet the standard as toyota (and therefore gm's price goes up, and makes their car less competitive) GM only have themself to blame for their shitty old technology.

If people accept that the state must ban substances which are (for instance) carcinogenic, because companies won't stop using them out of the goodness of their hearts, why have a problem with this? GM won't start producing economical vehicles for fun, they WILL only do it if legislation requires it.

 

Although as a group the auto companies will pass along costs, there will be winners and losers. Higher prices will also shrink the volume of cars. Given enough time, and this law allowed more than one generation of design, each auto maker should be able to meet cafe if they try.

Hyundai should be the big winner as they do not build guzzlers and were improving fuel economy anyway. GM is a big loser, since it takes most of its profit from trucks and SUVs. GM unlike hyundai and toyota has never made a profitable small car. If they can't sell small cars then they will have large fines for their other vehicles. The cruze may be the first. Toyota has low costs to meet regulations, but I doubt the new regs help or hurt them.

 

So GM can chose to continue selling big stupid trucks, and they will cost more and more to buy (since emissions regulations, and fines for not meeting CAFE will make them more expensive to produce) and operate (petrol is not getting cheaper) meaning people buy less of them, so they get more expensive, until finally GM dies the pointless death it deserves.

At this point hyundai, toyota and ford will be left competing with each other over small, cheap hybrids. sounds like EPA are onto a winner.

 

Well, the inability to meet cafe standards are one reason it should not have been bailed out. I hope that the volt and cruze will sell so that it does not go bankrupt again. The biggest problem with the cafe standards is they did not rise in the 90s and set up a system where SUVs and large trucks were favored because of lighter standards. Forbes had an excellent editorial saying that federal gas taxes should be raised instead of cafe standards. One problem with the standards is it may make the companies make efficient cars no one wants to buy. The demand side also needs to be taken care of.

I support these cafe standards. I don't like the crazy numbers that have been thrown out for 2025.

 

Crazy numbers of 40MPG?

 

62 mpg CAFE, which is roughly 43 MPG sticker. Granted, that's the high end.

 

When we are talking about fleet it is crazy. They are talking about 43mpg epa combined. that would mean any sports car, suv, truck would have a huge penalty. Killing classes of vehicles is not really the mandate of nhtsa or epa. It is of carb, but people do need trucks to work. There is already a backlash against these mandates to kill classes of cars. Remember killing them will not make the fleet more economical, it will just keep older more polluting vehicles on the road. A raising of gas taxes to shift those that do not need these vehicle so more efficient ones is much more likely to make the fleet more efficient then crazy cafe standards.

 

well if Toyota keeps their cars same price, and GM has to up the price, then GM will lose sales to Toyota... so GM will absorb these costs and not be able to pass the costs to customers.

 

In the UK cars/truck prices are set this way already. The V8 land cruiser starts at $96,119. They don't sell many, Toyota can't sell many. it works fine.