When the National Highway Traffic Safety Administration published an initial draft of the new fuel economy rules this spring, they gave automakers and other interested parties until July 1 to comment before finalizing the rules. That comment period is now over and GM and others have responded. Under the energy bill that was passed in December 2007, NHTSA is supposed to factor in what is technically feasible as well as what kinds of vehicles are expected to be on the market in setting the standards. If large numbers of plug-in vehicles are available they can set the standards higher. In GM's comments, the automaker told NHTSA that plug-in hybrids and extended range electrics will be available by the middle of the next decade but the agency shouldn't expect enough of them to be available to make a major impact on fleet average mileage. GM is currently only forecasting production of 10,000 Volts in 2011, rising to 60,000 the following year. Similarly, the plug-in hybrid Saturn Vue will likely only have limited availability at first. Regardless of what automakers and NHTSA want, if gas prices don't subside, the standards may be a moot point as the market may supersede them.

[Source: Detroit Free Press]

The way the draft rules have been defined for the new Corporate Average Fuel Economy standard, Porsche is at a distinct disadvantage. Because the standards for any given vehicle are based on the size of the vehicle, Porsche's relatively small cars have to meet a higher standard than other manufacturers. Apparently Porsche doesn't really care. Detlev von Platen the new CEO of Porsche Cars North America has declared that the German sports car (and SUV) builder will not downsize its vehicles or engines and will not use diesel engines. Porsche doesn't plan to change the high performance nature of its vehicles according to von Platen, although they will increase the fuel efficiency of those vehicles. The Cayenne SUV and the upcoming Panamera four door will both get a new hybrid powertrain that will be shared with Volkswagen and Audi. However, the Cayenne hybrid won't appear until at least late 2010. Porsche has managed to increase the fuel economy of its vehicles to the point that none of the current models are subject to the gas guzzler tax and last year the company average was high enough to avoid a CAFE fine. Going forward that will almost certainly change as Porsche doesn't have any expectation of meeting the 41.3mpg average the new draft rules would impose on the company by 2015.

[Source: Autoweek]

When NHTSA recently released draft regulations to implement the fuel economy requirements from December's Energy Bill a controversial element of the proposal were the footprint-based thresholds. Rather than setting a single requirement that all manufacturers fleets would have to meet, the proposal set mileage thresholds based on the vehicle's footprint (the wheelbase x track width). Each manufacturer would get a requirement based on a sales weighted average of the footprint values for the vehicles it sells. Companies that sell more vehicles with large footprints would have a lower requirement. At the time, I postulated that this might have the effect of encouraging carmakers to stretch the wheelbase and track of their new models in order to lower the required fuel economy.

Now we have a sighting of what is likely a mule for the next generation BMW 1-series. While this vehicle was obviously built before the recent rule announcement, and it does follow the long time trend of making successive generations of a car bigger, it certainly points to the possibilities of the new rules. Of course I'm using this particular photo to illustrate the possibilities of the rules. Instead of encouraging manufacturers to go smaller, the opposite is the case. The upside is that with fuel prices likely to continue rising, consumer demand for more efficient vehicles will likely outpace anything the feds try to do on this subject and the whole discussion will be moot.

[Source: Motor Authority]

When Transportation Secretary Mary Peters announced the first round of new CAFE rules last week, there was nary a peep from the automakers who had complained so vociferously about the the 35mpg standard in the first place. Now there is a clue as to why they have been so quiet. Until now, the fuel economy rules have always been pretty simple. There was a threshold for each model year (currently 27.5mpg for cars) and the sales weighted average for all cars sold by a manufacturer had to beat that level. All companies had the same threshold. If they fell short they paid fines and if they exceeded it they could earn credits towards future years.

Now it's much more complicated. There is a sliding scale based on the footprint of each individual vehicle. The footprint is defined as the wheelbase times the average of the track width or the area within the wheels. The larger the footprint, the lower the threshold that vehicle has to meet. Therefore for two cars of similar overall size but one with a longer wheelbase, the longer one would have a lower mileage requirement. Each automaker is then assigned an individual threshold to meet based on the sales weighted average footprint of the vehicles it sells. A company that sells more large footprint vehicles would have a lower hurdle to jump. One that sells predominantly smaller cars would have to get better mileage. As a result a company like Porsche or Ferrari who sell relatively small sports cars would have to meet a higher standard than Ford or General Motors who sell more large trucks. The entire premise of this rule is absurd. This rule will likely have the effect of giving manufacturers an incentive to maximize the wheelbase and track of new vehicles in order to minimize their CAFE requirement.

The only saving grace here is that, overall, as fuel prices continue to climb, buyers are likely to migrate to more efficient vehicles regardless of the footprint.

[Source: NHTSA, AutoWeek]