• Mar 16, 2011
According to the Environmental Protection Agency, it will cost automakers an average of $948 per car to meet the 34.1 mile per gallon Corporate Average Fuel Economy standards that will be adopted in the United States in 2016. The current standard sits at 27.5 mpg. The EPA estimates that the average owner will save some $4,000 in fuel costs over the life of the vehicle, resulting in a net savings of over $3,000 per owner.

Sounds like a fair deal, right? Well... let's delve deeper into the numbers. The New York Times reports that some automakers will be paying much more money to reach the 2016 requirements than others. With its penchant for hybrid cars, it's no surprise that it will cost Toyota the least amount to comply (just $455 per vehicle). Kia ($501), Honda ($574) and Hyundai ($745) all have it relatively easy as well.

Now things get a little murkier and a bit more domestic. General Motors will reportedly have to shell out $1,219 per vehicle to comply with the 2016 regulations; Ford will spend $1,228 per vehicle. Chrysler has it even worse, with an estimated $1,328 per vehicle. Still, that pales in comparison to Volkswagen, which is expected to spend a whipping $1,693 for each vehicle it sells here in the States to hit the 34.1 mpg requirement. Yowza.

As pointed out by the NYT, though, we shouldn't necessarily feel bad for those automakers paying more per vehicle. After all, companies like Toyota and Honda have already paid huge sums of money in research and development costs to get their fleet mileage figures where they are – in a way, you could say that the EPA is forcing thirstier brands just to follow suit. For more analysis of the numbers and how they will affect automakers and consumers, click here.

[Source: The New York Times | Image: Rich Pedroncelli/AP]


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  • 33 Comments
      Noz
      • 3 Years Ago
      It will cost them next to nothing....they will simply pass on the cost to the consumer.
        • 3 Years Ago
        @Noz
        @drive: your argument doesn't make sense because the regulations apply to ALL automakers that sell cars in the US.

        Additionally, we bailed out GM and Chrysler to minimize the recession damage - it had nothing to do with decades of short-sighted managment. The bailout represented hundreds of thousands, if not millions of jobs, either directly (automakers and dealers) and indirectly (supply chains).

        Finally, this increase in fleet efficiency is not a punishment - it's waking up to harsh realities that no-one can escape. The minimum has been neglected, primarily due to lobbying by the automakers and Big Oil, both domestic and foreign. Politics recognizes the need to minimize pollution as quickly as possible, and the need to reduce foriegn oil dependence, while also recognizing the fact that we can't supply ourselves with enough oil for everything we currently consume.
        • 3 Years Ago
        @Noz
        The harm is they cannot necessarily pass it on to the consumer. They will lose business if they do that. So they have a Hobson's choice, lose more precious market share or take a hit on their profit per vehicle. Government mandates are quickly making new cars completely unaffordable to most people. I make a six figure income but I refuse to pay 20-30 grand for a car. We shouldn't be surprised when we lose our domestic auto industry completely. We bail them out only to put more mandates on them to put them out of business. This is what passes for industrial policy on the left.
      • 3 Years Ago
      The CAFE standards are stupid and evil and so are the people that support them.

      The CAFE standards are stupid because they utterly fail in their intended purpose: fuel conservation. An economic law called Jevon's paradox mandates that increasing the efficiency of the use of a resource always, without exception, increases the rate of consumption of the resource. This law has proven true in every single technology since the dawn of the industrial age and it is quite definitely operating in the case of vehicles. We have been on a huge gasoline efficiency binge since the 70s yet despite all improvements in technology and forced reductions in vehicle size, our per capita gasoline usage, world wide, has only increased.

      The CAFE standards can never, every reduce fuel consumption, end of story.

      The CAFE standards are evil because (1) they kill people and (2) they are a stealth reduction in individual freedom of choice.

      CAFE kills by forcing manufactures to build smaller cars and all other factors being generally similar, smaller cars are substantially more dangerous than larger vehicles. Several hundred people a year are likely needlessly killed in a vain attempt to conserve fuel. When given the choice to burn more fuel or burn human lives, the CAFE standard supporters choose to kill people.

      The CAFE standards are a stealth loss of freedom because most people don't understand that the laws restrict the types and numbers of vehicles that manufacturers can offer for sale. People think they still have choice because they can choose freely from the vehicles that manufacturers can sell but they don't see the choices they lose invisibly because of the law.

      Would you still feel free if the government said, "Hey, you are personally free to purchase and read any book we allow publishers to print. However, if a publisher prints a book we don't like, we will fine them and eventually drive them out of business." Would you feel you were NOT censored?

      The CAFE standards are the purely result in mixing elitist, environmental puritanism with economic and technological illiteracy. They do no good and cause much harm and I am appalled by how many people believe them to be both effective and moral.
        • 3 Years Ago
        "Evil"? Really? "Kill people"? Really? Who let this nut out of the asylum?

        I recommend you stay away from New York state - a GOP politician wants to ship poor souls like you to a bad place out of the country.
        • 3 Years Ago
        Time to Think,

        I'm sorry. I forgot to mention I was playing by the "If CAFE standards were done by a private company" rules.

        If a company or group of companies had created a product or service that (1) actively defeated its stated purpose and (2) statistically caused hundreds or even thousands of otherwise avoidable deaths a year, we would hear nothing but denouncements that the companies were evil and driven by mindless greed.

        Of course, since the CAFE standards are done by the government and supported by people who tell us they wish only the common good, we are just supposed to judge the morality of their actions based on their stated intent. Under the normal rules of the game, the intelligence and morality of people, politicians and bureaucrats who support CAFE standards must be judged by their degree of unicorn hugging, not the actual and easily foreseeable effects of their policies.

        I just decided to play by a different set of rules and apply a different rhetorical standard. Funny how everyday and common yet still hysterical and overtop rhetorical forms suddenly become unacceptable when applied to an unusual target.



      • 3 Years Ago
      I don't see how it will 'cost' them even $1 ... they already sell the higher MPG vehicles at a profit ... selling more of vehicle A instead of vehicle B when both vehicles are sold at a profit ... is still profit either way ... there is no 'cost', or loss.

      If they want to admit to gouging the consumer higher mark up costs on the lower MPG vehicles then that is there fault ... and their choice ... and at most they still are not 'costing' anything ... they are selling more vehicles with a smaller margin ... if and only if the high MPG vehicles are sold at a lower / smaller margin / mark-up.

      As others have said they are likely to increase the margin / mark-up on the higher MPG vehicles to just pass the profit difference on to the consumer anyway ... and the consumer will still have a net savings anyway ... still there is no 'cost'.

      Lastly ... the fleet distribution MPG for the companies is their own doing ... it is not accidental ... it was 100% intentional ... It is no accident that Toyota not only has the best fleet MPG , but also sells and produces more vehicles than any of the others ... Toyota is the world's largest Automotive manufacturer... the other companies could have done the same thing ... but chose not to ... you would think they would take a hint when companies like Toyota are selling more than them .. eating up their market share.
        • 3 Years Ago
        What if I don't want vehicle A? What if it has none of the features and attributes I'm interested in? What if the majority of buyers have no interest in vehicle A? Are you going to force them to buy it? If a vehicle is a gutless wonder I don't care if it gets 50 mpg, I have no interest in it. If it can't carry 5 adults comfortably I have no interest in it. If it limits me to paved roads I have no interest in it. MPG isn't even in the top five things I consider when looking at a vehicle.
      • 3 Years Ago
      Look at a "domestic" like ford or gm, they sell plenty of cars with diesels and smaller petrols in other markets (the UK is a prime example) with and without stop start that can meet these relatively easy (These are not EPA targets but targets using what EPA used to use) targets.

      The development cost have already been spent on direct injection, common rail diesel, turbocharging, stop-start technology, hybrids, none of that is new to any of the brands with the exception of multi-air. Yes the technology will cost to add in but at American production volumes it won't be huge, and the buyer will recoup at the pump.

      If they buyer balks at the price you can sell him or her a smaller engine without increase in cost (but with non drag racer specs). A 0-60 that is 3 seconds faster or slower still gets you to the office at the same time.

      So its not pie in the sky, it can be done with developed technology, and the cost is really limited to what you are bolting in in addition.
        • 3 Years Ago
        Too few people here with BS meters. If the pay-off is so stark, why regulate the standard. Because you believe you are a genius and the average person is a moron and the car makers want to destroy the Earth?

        Some of the justifications here are clearly made by people who know more about environmental wonkishness than about cars. "If they can't afford the price, just sell them a smaller car. They don't have a sportscar." Sure. That's where the debate is, right? A woman with 4 kids would not care about a larger, more powerful engine. And if she does, she just looking or prestige. She can get by with stuffing her brood into an underpowered tin can. Screw her.
        • 3 Years Ago
        Right. The automakers already make adequate cars for foreign markets. Now they will be forced to bring their North American models up to par with their European models.
      • 3 Years Ago
      It amuses me to hear that higher efficiency cars will cost a lot more.

      If people embrace minimalism, and only buy what they really need in terms of size and performance, the cars could be cheaper plus deliver fuel economy that meets the newest standards.
      • 3 Years Ago
      @Hoth: ... you are more than welcome to spend your money any way you like ... if you want to spend more for leather interior , built in DVD players , Satelite Radio, GPS navigation, Power & heated seats, etc... etc... go right ahead ... feel free to buy as many extras , or $100,000 cars you like ... feel free to spend as much as you like on whatever interests you... just as people have always done.

      I have no issue with you having little to no interest in MPG ... although I'm sure your claims of not caring will evaporate as the cost per gallon keeps going up... I have no doubt you have already complained more than once to someone about the cost you spend on gasoline... and I have no doubt 5 or 10 years from now you will be complaining about it even more than you do now.

      No law is requiring any consumer to purchase vehicle A ... or Vehicle B... there is no ban on any type of vehicle ... even 2 MPG models.

      It is a known tactical weakness for our nation to have the dependence it currently does on outside powers ... it is therefore in the best interest of everyone who wants a secure nation to care some about reducing that dependence.

      The car companies can approach their fleet MPG numbers a variety of ways... I think just asking them to meet the fleet number and letting them find their own way is the correct way to do it.
      • 3 Years Ago
      Tthey will probably immediately decide to spend all the money of lobbying instead of on fixing the cars. Then in a few years the bill will get passed anyway. Then they will declare bankruptcy and the taxpayer will give them all the money back again so they can spend it on fixing the cars...
      • 3 Years Ago
      The hand writing is on the wall.
      It costs nothing to make an Electric car meet EPA Fuel Economy Standards.
      It also costs nothing to meet EPA pollution regulations.

      EV's should have a real cost advantage.
      • 3 Years Ago
      Those numbers are IMHO not really useful, as the situation is totally different for the named companies.

      Toyota has hybrids all around and sells hybrids in masses. So it's quite difficult to raise their mileage much more - adding hybrids for the less good selling but big models like Sequoia or Avalon is the only thing I see here.

      Honda has two big topsellers without a hybrid option - Accord and CR-V. Makes raising the mileage a lot easier.

      Ford has very good values on their cars, but rather bad ones on nost of their SUVs. And they sell masses of pickups, which drop the mileage even more.

      GM has the opposite: good SUVs, a pickup with hybrid. But their cars? Better don't talk about. And they have two premium brands with even much worse mileage.

      Chrysler needs to revamp their whole lineup. Their by far best selling model is also their biggest one - the Dodge Ram. They also have not a single model above 30 mpg - even most premium brands have a model, which beats their best (the Dodge Caliber). Their only chance is to sell Lancia Delta and Fiat 500 in the USA in masses and maybe add some hybrids.

      Volkswagen should have a damn easy solution: use the TSI engines.
      • 3 Years Ago
      While I'm not sympathetic to mandated fleetwide mileage standards I find the logic of this post to be without merit. By your own admission the magic # in savings is still $4000 so none of these car companies is at a disadvantage vis-a-vis the ROI. Now Toyota etc are at a competitive advantage to GM and Ford but what else is new. They earned it by being pro-active with their R&D. Good for them. Shame on us.

      And now we have yet another opportunity for increased corporate welfare to 2/3 of our auto manufacturers who shouldn't even exist anymore anyway. Perfect American bureaucratic government logic.

      • 3 Years Ago
      Whatever it is it will be too much.
      It will BK them.
      It will cause the sky to fall.
      It will be unreasonable and not doable.
      It will cause the economy to collapse and jobs to be cut.
      It will be impossible.

      ...and then they will do it and it will turn out it didn't cost nearly as much as they thought and we'll be on to some other fight for a better world with the regressives.
        • 3 Years Ago
        Also, bear in mind that CUVs and SUVs don't technically count. They are "light trucks" because of the rule:

        A light truck qualifies by any of the following:
        1) separate utility hauling area (think pickups); or
        2) able to seat 12+ people; or
        3) have a ground clearance greater than 6 inches.

        That's where all the SUVs and CUVs come from - they avoid the stricter car mpg minimum by raising the chassis a few inches.

        So, what I'd like to know is this: isthat 34.1 fleet average for all vehicles, or just cars, or is it a weighted average between cars and light trucks for a given manufacturer?

        Depending on what that number means, automakers can just make more CUVs and back off on large and mid-sized sedans.
        • 3 Years Ago
        +1

        Agreed. Same old bull. Kicking and striking against the inevitable every step of the way.

        Additionally, this "cost per car" to upgrade is not a realistic expectation of how MSRPs will change, if at all. Some vehicles made by domestic automakers already meet or exceed the standard - not many, but there are a few. Are those vehicles going to see a big jump in price? Maybe, maybe not. Will muscle cars and pickup trucks cost more? Maybe, maybe not.

        Also, there's more than one way to increase your fleet average. For example, Toyota has the Highlander and the 4Runner: except for external styling and a few inches here and there on the inside, it's the same vehicle. Cancel one of them. Same with the Sequoia and Land Cruiser: same vehicles, just cancel one of them. Right there, the fleet average will improve somewhat without a penny of R&D. Given all the massive SUVs on GM's roster, they could do the same thing very easily.

        As others mentioned in this thread, automakers can simply bring their more efficient foreign versions over here with minimal cost.

        Additionally, the rules can be amended - how will the new standards take into account EVs, H2, nat-gas, hybrid plug-ins? If they use the current equivalence measure, mpge, then an EV and a couple of plug-in hybrids should make a big dent in overall fleet average. Ford and Toyota are already on their way with that. By the 2013 model year, Ford will have at least one, probably three, plug-in hybrids in addition to a new hybrid, a next generation of their existing two hybrids, and the Focus EV. Toyota is expanding the Prius into a family of hybrids, including a plug-in version, all by the 2013 model year. It's the stone-age folks at the likes of Chrysler that are pretty much FUBAR.

        Besides, both extremes of the political spectrum want to reduce fossil fuel dependence (at least from foreign sources). And, since the US cannot provide even half it's own daily petroleum consumption, taking into account all currently untapped domestic oil deposits, increased efficiency is inevitable. It's in the best interest of both parties to increase mpg requirements sooner rather than later.

        Besides, a beneficial side-effect is reduced air pollution, so that's good for those of us that breathe and saves money on medical costs, etc.

        Also, it's a fallacy to say that the automakers will pass on the costs to the consumer. That's simply not true - not entirely. They can't just ramp up MSRP if too few people can afford it. With this trend of "competitiveness" and union-busting, the standard of living in the US will fall, so there will be even fewer people capable of affording even the existing prices, much less higher prices. The companies will eat most of the cost - given the obscene and undeserved bonuses given to execs alone, cutting those in half would go a long way toward covering R&D.

        As in all things, this stitch in time will save nine in the fairly near future.
      • 3 Years Ago
      Gee, an extra ~$1000 to save $4000..

      Yeah, people are gonna hate these new cars.
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