Auto makers comply with fuel economy mandates by making cars lighter and more dangerous.
Fewer tires, higher taxes.
That may be what's in store for drivers under the federal government's spiraling fuel economy mandates (known as CAFE, for Corporate Average Fuel Economy). The Department of Transportation is floating 62 mpg as a possible standard for 2025, more than double the current 27.5 mpg standard. How the industry can meet that target, and at what cost, is anyone's guess. A new study in mid-June by the nonprofit Center for Automotive Research in Ann Arbor, Mich. put the tab at about $10,000 extra per new vehicle, while admitting that even this estimate might be far too low.
And that's not the only bad news; in the past few weeks there have been two other unwelcome developments. First, GM announced that several versions of its compact Chevy Cruze would no longer have spare tires; instead, they'll have vehicle-powered sealant repair kits. This is a major jump in the trend toward eliminating spare tires, a trend due largely to CAFE's drive to shed every possible ounce of car weight.
Some argue that spare tires are unnecessary, given the growing presence of run-flat tires, tire pressure monitors, and roadside assistance systems. But the fact that spares are being eliminated in the name of fuel economy, rather than market demand, demolishes one of the chief claims of CAFE's advocates. For several decades, the need to reduce vehicle size and weight in order to raise mileage has been CAFE's Achilles' heel. Smaller, lighter cars not only hold fewer passengers and less baggage; they're also less crashworthy. CAFE-induced downsizing causes several thousand additional traffic deaths per year.
Proponents of CAFE argue that while vehicle downsizing may once have been needed to raise fuel economy, it has been obviated by new technologies. As a result, they claim, CAFE no longer forces us to give up safety for other car features.
Yet despite this talk of new technologies eliminating trade-offs, here we have GM scrapping the spare tire to comply with CAFE. The station wagon disappeared under CAFE because it was a highly regulated passenger car (unlike SUVs, which were less-regulated "light trucks"). Now, with the spare tire following the same pattern, we have another hard-to-miss symbol of what CAFE hath wrought.
Getting rid of spare tires alone won't be nearly enough to meet the more stringent mandates that are looming. In early June, GM unveiled another strategy—higher gasoline taxes. GM CEO Dan Akerson proposed boosting the federal tax by up to $1 per gallon to increase small car sales.
This isn't the first time a car maker's chief executive has called for higher gas taxes. In 2009, after gas had dropped to below $2 a gallon from $4, Bill Ford made a similar proposal, citing the need for a "price signal . . . strong enough so customers will continue buying smaller, fuel-efficient cars." Mr. Ford joked about his reputation as "something of a Bolshevik" among his industry colleagues. But Mr. Ford's wish for higher gas prices has come true; gas is now in the high $3 range. And yet even that isn't high enough for GM's Mr. Akerson.
It would be one thing if these gentlemen wanted to replace CAFE with higher gas taxes. That would at least give us a politically honest fuel efficiency regime. Rather than being bamboozled by the smoke and mirrors of CAFE's technological mandates, consumers would learn from a gas-tax hike exactly what government was doing to them. But if that's what Mr. Akerson means, then he'd better say so, because he now sounds like another antimobility environmentalist pushing a sin-tax increase.
Mr. Akerson's stand demonstrates CAFE's real perversity—by forcing mileage standards far above what consumers want, it pits car makers against their customers. Car makers need high gas prices to force buyers into the vehicles that government demands the industry sell. The public hopes for low prices, and if markets push prices down, then consumers ought to be able to enjoy their good fortune.
Two weeks ago the Insurance Institute for Highway Safety released its latest study of vehicle death rates. Like its previous studies, this new report found that larger and heavier models continue to be safer. SUVs heavier than 4,500 pounds, for example, have a death rate less than one-third that of cars under 2,500 pounds. The politics of energy efficiency may have gone insane, but the law of physics remains.
Originally published in The Wall Street Journal on June 26, 2011.