• Jul 30, 2009
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.

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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.
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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.

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  • 28 Comments
      • 5 Years Ago
      Hollywood cars get a pass is how it should be titled.

      After all, you would not want to upset your biggest supporters
      • 5 Years Ago
      "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."

      Why should US law consider what is sold elsewhere in the world? That doesn't make sense at all.

      Usually John, your rants are pretty well thought out, but this one is a little off.
        • 5 Years Ago
        His point is that we're not talking about some German company that sells 3k units worldwide with half of them being in the U.S., thereby crushing their business if their cars became illegal here. We're talking about huge companies that can afford the R&D to get vehicles to meet emissions just like the other full sized auto companies or stop selling the ones that pollute beyond the law on our soil.
      • 5 Years Ago
      Who is he?
      • 5 Years Ago
      I agree with John McElroy that this is completely unfair. Are Farris and carguy lobyists that are really on top f this topic.
        • 5 Years Ago
        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.
        • 5 Years Ago
        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.
        • 5 Years Ago
        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?
      • 5 Years Ago
      This does sound like rationalization. I thought greenhouse gases were a global issue therefore the volume requirements in the U.S. market are irrelevant. The U.S. is reported to consume much of the world's resources (gasoline purchased in the U.S.) and in the lifestream of the product it likely will be destroyed or junked in the U.S.
      • 5 Years Ago
      As long as we are granting arbitrary exemptions, can I get a waiver that allows me to go up to 30mph over the speed limit on expressways without being cited for speeding?

      No? Ok, no prob, just thought I'd ask. :)

      I suspect we'll see a lot more of this type of hypocrisy as time goes on and the Obama administration realizes that we aren't all just one big group of friends who "just get along". Don't get me wrong, I wouldn't turn down a trip to the whitehouse for beer and munchies with the Prez either.
      • 5 Years Ago
      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.
      • 5 Years Ago
      how is this unfair? as long as the they build fuel efficient cars to balance out the others, what's the big deal? as some have said, there aren't that many sold to make a big deal about it.

      ...here's a nice article on euro co2 standards...just as tough as anyones.

      http://ec.europa.eu/environment/air/transport/co2/co2_home.htm

        • 5 Years Ago
        How is it unfair? Let me spell it out for you. Other manufacturers ALSO make low volume gas guzzlers but they don't qualify because rich people don't want to buy them. Period. And the California exemption is making steam come out of my ears. After all that pulpit bashing about suing the American auto companies for "ruining the environment". California can suck it.
      • 5 Years Ago
      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.
        • 5 Years Ago
        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?
        • 5 Years Ago
        Actually, a bit of quick Googling tells me that the number produced would probably be less than 3k total.
        • 5 Years Ago

        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>?
      • 5 Years Ago
      Typical Washington BS. Pass all these onerous regulations that apply to all the "little people" and not the elites like them. It's outrageous.
      • 5 Years Ago
      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.
        • 5 Years Ago
        They do make compliant cars, but they also make cars that aren't compliant because that's what some people want.
      • 5 Years Ago
      Where is the source of these claims? I would like to see what Congressman has proposed/amended this.

      If this is true it is entirely unfair and anticompetitive, which is one reason of many why domestic automakers can't compete with their foreign competition.
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