This week marks the close of the North American International Auto Show in Detroit and the opening of the show here in Washington, DC. Following up on record-breaking 2015 auto sales as well as big debuts at both the Consumers Electronics Show and in Detroit, there’s been a lot of automotive coverage…not all of it good, unfortunately. For example, this piece in the Detroit News contains a whole host of errors common to coverage of the automotive industry—errors that this blog post is meant to help navigate.
There are three main mistakes that reporters have been making: 1) conflating regulatory fuel economy targets and consumer labels; 2) suggesting that an increase in truck/SUV sales will prevent manufacturers from achieving regulatory targets in 2025; and 3) claiming that manufacturers aren’t selling enough hybrid- and plug-in electric vehicles and therefore can’t possibly meet regulatory targets in 2025. The rules are complex, and automakers have asked for more flexible policies, but once you know what to look for it’s easy to avoid these basic factual errors.
Efficiency targets ≠ Sticker MPG
The most obvious mistake that a reporter can make is comparing regulatory targets with what new car buyers see on a vehicle’s label. Frequently when the University of Michigan posts its monthly estimate, I inevitably see someone make this mistake, even though a comparable test value is available.
While the EPA had the good sense to modernize test procedures and add new tests to ensure that fuel economy labels offer the consumer the best possible estimate of fuel economy, passenger vehicle regulations are required by Congress to continue to be based on two simple test cycles that no longer represent real-world driving conditions. While improving fuel economy on the two-cycle test used for regulatory purposes will result in fuel economy improvements on the label for consumers, comparing these apples and oranges is used by automakers to exaggerate the challenge of meeting the regulations.
The 54.5 mpg-equivalent target for 2025 is also not a fixed value. As described below, the regulatory target for 2025 is actually likely to be significantly lower if SUV and truck sales continue to outpace car sales, though all vehicles will continue to become more efficient regardless.
SUVs don’t matter (at least, not how you think they do)
Fuel economy and global warming regulations are dependent upon the size and type of the vehicle. So when a manufacturer sells more trucks and SUVs, its regulatory target is lowered. For instance, if a manufacturer sold nothing but full-size pick-ups in 2025, its target would not be 54.5 mpg but only 35 mpg on the regulatory test cycle (and even lower after factoring in improvements to the air-conditioning system). The standards were designed to be flexible and give consumers more efficiency, no matter what sized vehicle they chose to buy.
The idea that this somehow makes it more difficult for manufacturers to meet regulations is certainly a head-scratcher, but automaker assertions to this effect are often left unchallenged. In fact, it’s the automakers that requested this flexibility, so it’s particularly galling for them to suggest this somehow creates difficulty for them.
Ten percent of vehicles sold last year met standards for 2020 or beyond. Of those vehicles, fully 60 percent were conventionally-powered trucks and SUVs, including variants of the Honda CR-V (best-selling SUV) and Ford F-150 (best-selling pick-up). Manufacturers are showing today that some of their most popular SUVs and pick-ups can meet the targets of tomorrow—why would that possibly make things harder for them?
EVs matter, but not for fuel economy regs
Manufacturers claim that low gas prices are making it impossible to sell electric vehicles—despite the fact that plug-in vehicle sales saw a record breaking end to 2015. There are numerous factors that influence EV sales, including the lack of availability of many models outside the West Coast and the disinterest with which many dealers approach their sale. Regardless of these issues, however, one thing remains clear—electric vehicles may be a critical part of our clean transportation future, but they are not needed to comply with fuel economy regulations.
According to EPA and NHTSA estimates, compliance with fuel economy and global warming emissions in 2025 would be possible with fleetwide sales of between 0 and 2 percent plug-in electric vehicles—in other words, about where we are at today. While some manufacturers like Nissan, General Motors, and Tesla are investing more resources in the deployment of electric vehicles, compliance with fuel economy regulations is focused on improving the efficiency of gasoline-powered vehicles, through lightweighting; smaller, turbocharged engines; more efficient transmissions; and a host of other technologies for the conventional, combustion-engine-powered fleet. Increased sales of electric vehicles would be great news for the climate, but it would have little relevance to manufacturers’ ability to meet regulatory targets.
Automakers perpetuate these myths to avoid regulations—don’t let them off the hook!
Automakers know better, but they are spouting these ridiculous talking points with one goal in mind—convincing the public that the standards should be weakened. This disingenuous tactic only works if reporters help to spread these myths.
The mid-term review currently underway is looking at the program to determine whether the targets for 2022-2025 are achievable. With manufacturers currently earning credits for being ahead of schedule and an increased use in program flexibilities that help manufacturers achieve emissions and fuel reductions at lower cost, there’s no reason to undercut them. Not only are the targets for 2025 achievable, but the agencies should consider strengthening the rule.
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