Fuel efficiency standards in the United States just got tighter--almost 10% tighter. Automakers are already burdened by a shift in focus on electric vehicles. Will tougher fuel efficiency standards satisfy those supportive of Biden’s green agenda, or will they fracture off a segment of Biden’s supporters who think the standards didn’t go far enough?
The convenient development of high gas prices in the United States over the summer may have generated support for high fuel efficiencies, as drivers struggle to fill up at $3+ per gallon at the pump while many are still not employed after the pandemic.
Emboldened, earlier this month, the White House unveiled its rules for fuel efficiency and emissions for vehicles in the 2022 and 2023 model year, resulting in a fleet average of 52 mpg, according to a White House fact sheet.
But the new standards threaten to strand the Biden Administration on an island alone, with critics on the right saying the standards go too far, and some on the left saying it’s not far enough.
The fuel efficiency standards and the White House’s new guidance on electric vehicles makes a number of assumptions. It assumes job losses will not be triggered; that battery metals will be forever plentiful; and that the mining process is less harmful to the environment. It also assumes it will save money--for everyone. So better for the environment, less expensive for all.
If those assumptions hold up, that would be the best of both worlds.
But for Biden, it could all backfire.
Too Far, Yet Not Far Enough
Drivers do benefit from increased fuel efficiency. After all, who wouldn’t want their vehicle to get more miles per gallon? Suburban drivers everywhere would relish the notion of increasing that 16 MPG rate to shave some costs off filling up that ravenous 28-gallon tank.
And with gas higher than $3 per gallon in the United States right now, the savings are even more significant. For every additional mile per gallon in efficiency, the average consumer would save perhaps $400 per year.
But that increased fuel efficiency will come at a cost for automakers--a cost that most assuredly would be passed onto the car buyer. And some would argue that it would be more beneficial for automakers to focus on electric vehicles.
Despite the upfront costs, fuel efficiency has made many a president’s agenda. But it’s also met with tons of resistance.
Brick Through the Air, We Don’t Care
Of course, despite all the hoopla surrounding fuel efficiency, the bottom line is that for the most part, a significant amount of Americans are willing to forgo this efficiency, as proven by the types of cars most popular in the United States.
America loves its trucks and SUVs. Case in point, the Ford F-Series is the hottest selling vehicle in the country, selling 414,345 vehicles in the year to date. Of the top ten best-selling cars so far this year, seven are trucks/SUVs--even though many of them, such as the Suburban, have the aerodynamics of a brick hurtling through the air.
People are not only willing to spend a hefty chunk of change on a vehicle like a Suburban, but they are also willing to pay hundreds to fill it up at the pump, even though it’s substantially more than, say, a Honda Civic.
This is because, despite its brick-like qualities in both weight and design, it is inherently useful as a utility vehicle.
A subcompact crossover SUV, less so.
Of the five most fuel-efficient gasoline-only vehicles--the Mitsubishi Mirage, Hyundai Elantra, Hyundai Accent, Kia Rio, and Honda Civic--only one made the top ten for this year’s sales.
This doesn’t bode well for any campaign that seeks to undermine the status quo of the hefty vehicle in favor of fuel efficiency, no matter how noble the cause.
Nevertheless, for some, Biden’s ratcheted plan didn’t go far enough or fast enough.
Even with Biden’s ambitious plan to have half of all new car sales be EVs by 2030, critics argue that the new standards, which include fuel efficiency and EV sales targets, won’t cut as much pollution as Obama’s ambitious plan from 2009 would have--at least not in the near term. Obama’s plan would have required automakers to reach 54.5 mpg by 2025, but it was later rolled back to 40 mpg by President Trump.
Leading up to the announcement by the White House, there was a gaping divide between various groups.
The UAW felt Trump’s rollback of Obama’s fuel efficiency targets was too soft, opening the door for the U.S. to get behind its global competitors as other nations seek to shore up efficiency. Hard-core environmentalists see Obama’s standards as the ideal and feel shortchanged by Biden’s watered-down version.
For Biden, this is a dangerous position. To have the democratic party split or even partly unhappy with a major change that is fundamental for Biden’s success, could make it difficult for him to get support for other climate-related agenda items in the future.
By Julianne Geiger for Oilprice.com
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