Autoline on Autoblog with John McElroy
Why Are German Automakers Exempt from U.S. CO2 Standards?
If you've ever wondered why the American automakers have such a hard time competing in their home market, all you have to do is look at the latest move from the American government. It's going to exempt the worst gas-guzzling European luxury cars from having to meet U.S. CO2 standards. Companies like Mercedes, BMW, and Porsche can continue to sell cars that don't meet those standards, all with the gentle blessing of generous Uncle Sam.
Do you think for a second that the American government would ever let GM, Ford or Chrysler sell vehicles that pump out more greenhouse gases than the law allows? No, never.
____________________________________________________________________________________
John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
____________________________________________________________________________________
The cars getting this exemption represent some of the most profitable products for the companies that make them. Cars like the Mercedes S600 or BMW M6 which are rated at 13 miles per gallon (18 l/100km), or Porsche Cayenne Turbo S which is rated at 14 mpg.
These are "halo" cars for these brands. They help make these brands aspirational. And they help them sell all the other cars in their lineups. While these are the kinds of cars that are near and dear to the hearts of all enthusiasts, is it fair to grant them CO2 exemptions?
No, it's blatantly unfair on two levels. First off, it's unfair to American automakers (and Japanese and Korean) who cannot get this kind of exemption. As Cadillac and Lincoln continue to try and claw their way back to the top of the luxury segment there's no way they can effectively compete if they have to meet the law and their European competitors do not. Second, the cars that are getting these exemptions are only within the reach of a fairly wealthy clientele. In other words, these emission standards only apply to ordinary citizens, not the rich.
The federal government justifies these exemptions by saying it doesn't involve very many cars, and they will be in effect for only four years. Specifically, the exemption applies to automakers who sell fewer than 400,000 cars annually in the American market. Some excuse. This still exempts to about a quarter of the cars that they sell in the U.S., and it ignores the fact that BMW and Mercedes each sell well over a million vehicles on a global basis.
California is also granting CO2 exemptions to these companies, but it applies to all the vehicles they sell and will be in effect for the next seven years. Remember, this comes from the state that loudly proclaimed it was finally going to force Detroit to do something about CO2 emissions. Can you imagine the uproar if GM, Ford and Chrysler asked California for the same exemptions?
None of this makes any sense to me. It's not as if we're talking about small, low-volume automakers who are struggling to survive and need more time to figure out how to develop new technology to meet these CO2 regulations. With Mercedes, BMW and Porsche we're talking about some of the most powerful and technologically advanced automakers in the business.
Clearly the German automakers are quite adept at lobbying American politicians. In Washington this exemption is referred to as "the German Provision." No doubt their dealers played a key role in getting such special treatment. Yet I can't blame them for looking out for their own interests.
What I find so troubling in all this is that special dispensation is being granted by the American government to foreign automakers to ensure that the jet set can keep their toys.
Autoline Detroit
Airs every Sunday at 10:30AM on Detroit Public Television.
Autoline Detroit Podcast
Click here to subscribe in iTunes
Follow Autoline on Twitter for ongoing updates every day!
If you've ever wondered why the American automakers have such a hard time competing in their home market, all you have to do is look at the latest move from the American government. It's going to exempt the worst gas-guzzling European luxury cars from having to meet U.S. CO2 standards. Companies like Mercedes, BMW, and Porsche can continue to sell cars that don't meet those standards, all with the gentle blessing of generous Uncle Sam.Do you think for a second that the American government would ever let GM, Ford or Chrysler sell vehicles that pump out more greenhouse gases than the law allows? No, never.
____________________________________________________________________________________
John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
____________________________________________________________________________________
The cars getting this exemption represent some of the most profitable products for the companies that make them. Cars like the Mercedes S600 or BMW M6 which are rated at 13 miles per gallon (18 l/100km), or Porsche Cayenne Turbo S which is rated at 14 mpg.
These are "halo" cars for these brands. They help make these brands aspirational. And they help them sell all the other cars in their lineups. While these are the kinds of cars that are near and dear to the hearts of all enthusiasts, is it fair to grant them CO2 exemptions?
These emission standards only apply to ordinary citizens, not the rich.
No, it's blatantly unfair on two levels. First off, it's unfair to American automakers (and Japanese and Korean) who cannot get this kind of exemption. As Cadillac and Lincoln continue to try and claw their way back to the top of the luxury segment there's no way they can effectively compete if they have to meet the law and their European competitors do not. Second, the cars that are getting these exemptions are only within the reach of a fairly wealthy clientele. In other words, these emission standards only apply to ordinary citizens, not the rich.
The federal government justifies these exemptions by saying it doesn't involve very many cars, and they will be in effect for only four years. Specifically, the exemption applies to automakers who sell fewer than 400,000 cars annually in the American market. Some excuse. This still exempts to about a quarter of the cars that they sell in the U.S., and it ignores the fact that BMW and Mercedes each sell well over a million vehicles on a global basis.
California is also granting CO2 exemptions to these companies, but it applies to all the vehicles they sell and will be in effect for the next seven years. Remember, this comes from the state that loudly proclaimed it was finally going to force Detroit to do something about CO2 emissions. Can you imagine the uproar if GM, Ford and Chrysler asked California for the same exemptions?
None of this makes any sense to me. It's not as if we're talking about small, low-volume automakers who are struggling to survive and need more time to figure out how to develop new technology to meet these CO2 regulations. With Mercedes, BMW and Porsche we're talking about some of the most powerful and technologically advanced automakers in the business.
Clearly the German automakers are quite adept at lobbying American politicians.
Clearly the German automakers are quite adept at lobbying American politicians. In Washington this exemption is referred to as "the German Provision." No doubt their dealers played a key role in getting such special treatment. Yet I can't blame them for looking out for their own interests.
What I find so troubling in all this is that special dispensation is being granted by the American government to foreign automakers to ensure that the jet set can keep their toys.
Autoline Detroit
Airs every Sunday at 10:30AM on Detroit Public Television.
Autoline Detroit Podcast
Click here to subscribe in iTunes
Follow Autoline on Twitter for ongoing updates every day!
Get a WordPress.com Blog
Reader Comments (Page 1 of 2)
Farris 7:06PM (7/30/2009)
WTF John. How many Cayenne Turbo Ss, M6s and S600s are sold each year? I'm willing to bet it's less than 10k. TOTAL.
Not a huge deal, if you ask me. Just sensationalist journalism.
If Chevy had a car that was sold only in VERY small numbers (like something with a unique chassis and the ZR1 drivetrain), I'm sure they could get an exemption too.
Reply
Farris 7:09PM (7/30/2009)
Actually, a bit of quick Googling tells me that the number produced would probably be less than 3k total.
Level 7:30PM (7/30/2009)
I take it you forgot to read the part where its says "California is also granting CO2 exemptions to these companies, but it applies to all the vehicles they sell and will be in effect for the next seven years."
Level 7:31PM (7/30/2009)
I take it you forgot to read the part where its says "California is also granting CO2 exemptions to these companies, but it applies to all the vehicles they sell and will be in effect for the next seven years."
Level 7:32PM (7/30/2009)
Essentially all the Vehicles in Californian are exempt and some in the rest of the country....
that must have been some type of heavy bribery to accomplish that exemption in California out of all places in this country...and If CARB gets the exemption of all vehicles guess which other states follow CARB>?
Volk 9:58PM (7/30/2009)
So? What's your logic? It only re-enforces the point - the laws do not apply to those 10,000 citizens! And why is that?
carguy 7:08PM (7/30/2009)
I agree that the provision isn't fair but after years of the domestics lobbying against fuel and safety standards and demanding trade protection from foreign car-makers, they now have a new found disdain for political influence?
Reply
Carlos 9:03PM (7/30/2009)
You're also forgetting that Japan, China, and Europe all have some form of trade protection against foreign products. Yet America is trying to be the beacon of hope while screwing itself
Randy Taylor 7:17PM (7/30/2009)
I agree with John McElroy that this is completely unfair. Are Farris and carguy lobyists that are really on top f this topic.
Reply
Farris 7:25PM (7/30/2009)
I'm just about as far from a lobbyist as you could get. I'm a poor college student with opinions. :D
I just don't think there's much of an issue here... at least not the way John McElroy has portrayed it here.
For instance:
"It's going to exempt the worst gas-guzzling European luxury cars from having to meet U.S. CO2 standards. *snip* it's blatantly unfair on two levels. First off, it's unfair to American automakers (and Japanese and Korean) who cannot get this kind of exemption."
How many gas guzzling Japanese/Korean luxury cars are there on sale in the states? I agree that American gas guzzling luxury cars should be exempt as well, but honestly how many of those do we have anymore?
merlot066 8:31PM (7/30/2009)
There aren't many American gas guzzlers anymore. This is thanks to tons of research into fuel saving technologies that the Germans apparentley don't have to worry about. Normal automakers (Ford, GM, even Toyota and all the others) have to throw deceleration fuel shut off, direct injection, Eco-Boost, and all sorts of money sucking technology into their cars, Mercedes just slaps in a 5.5L engine in and ships it over.
Joseph 7:32AM (7/31/2009)
fuel off on deceleration is nothing new, and has been in place since the first fuel injection systems. No throttle + Engine RPMs above X = No Fuel, probably 2 lines of code inside the ECM's firmware.
It is also not unfair - American auto makers can do the same thing, especially with Diesel engines.
Jimbo 2:39AM (7/31/2009)
Farris, you're missing the point. The American, Japanese, and Korean companies are being forced to spend billions to meet these CO2 standards. Why shouldn't Mercedes, BMW, and Porsche. For that matter, I'd be pissed if I was VW since they apparently have to follow the rules like everyone else. Who knows...maybe the VW-Porsche merger will cause Porsche to lose its exemption.
Tim 7:16PM (7/30/2009)
I find this a little odd, but I also resent the government exerting unnecessary influence over any market so I am really quite conflicted on this.
But, what I will say is should you really expect anything different out of Washington? Corruption and double-standards are the norm, as long as career politicians and bureaucrats are running the show that isn't going to change.
Reply
Denis 7:28PM (7/30/2009)
Like the man from Illinois, president teleprompter.
axio.matik 9:51PM (7/30/2009)
That's right, Bush never used a teleprompter.
Tim 2:05PM (7/31/2009)
He's probably referring to Obama's complete inability to talk without one. But then Bush could speak worth anything even with one.
BTW, I just love how everyone assumes that anybody who even gives the slightest slight against Obama comes back with something about Bush. Disliking Obama and liking Bush are entirely different things. They are hardly the polar opposites that they want us to think they are. In fact, thus far pretty much everything Obama has done is just a more extreme version of what Bush did.
Chet 7:16PM (7/30/2009)
If this is about exempting only a few models, then why does the exemption only apply to certain autoMAKERS (under 400,000 units total per year)? Why isn't there already an exemption for any model from any maker that sells in small numbers? GM can't sell a limited-edition Cadillac to compete fairly with the M6 because GM also sells lots of fuel-efficient Chevys? That's anticompetitive.
Make BMW and Mercedes and Porsche play by the same rules as everyone else.
Or, better: don't ban cars with higher CO2 output -- tax them based on CO2 output.
Reply
hakuta 7:18PM (7/30/2009)
Who is he?
Reply
Adam Marcello 7:20PM (7/30/2009)
Sure it may not be as bad as he makes it out to be but its still wrong in every way. Why should anyone get an exemption? All the companies getting this exemption are fully capable of making compliant cars but they wont. This is ridiculous.
Reply