Major Automakers Spurred by California’s Higher Expectations

Honda execs John Mendel and Yasunari Seki relaunch the Insight hybrid in DetroitMajor automakers such as Honda and Chrysler are realizing that it’s time to throw away the old game plan and chart a new one around the sale of smaller, more fuel-efficient vehicles. Ironically, some of the most direct evidence of this changed thinking lies buried at the end of an otherwise apologistic report on the U.S. auto industry’s troubles in the L.A. Times earlier this week.

The story reports on a likely forthcoming waiver from President Obama’s EPA effectively allowing states to demand better fuel economy than the federal CAFE standard. After declaring this a “nightmare scenario for automakers,” the article delivers desperate quotes from General Motors and the Alliance of Automobile Manufacturers — the trade group that fought (unsuccessfully) to block California’s standards in court. A GM spokesperson sets the tone, saying that subjecting a depressed industry to these tough standards is like asking a cancer patient to, “finish chemo and then go run the Boston Marathon.”

Here’s an alternative bedside analogy that looks to a deeper cancer: Setting lower standards than the European Union and China are already phasing in is reminiscent of the fatalistic approach to cancer treatment in which doctors hid from their patients the full extent of their sickness.

If a carcinoma eats the auto industry from within, it is surely its own denial of the imperative to provide radically cleaner transportation solutions — a subspecies of what President Obama yesterday called, “our collective failure to make hard choices and prepare the nation for a new age.”

Which brings us to the L.A. Times article’s buried gem, in which Ed Cohen, Honda’s vice president for government affairs, makes the most of the last word. Cohen reports that Honda has been expecting Obama to unleash California’s regulators and laying plans for “a fleet far more efficient than even that called for under the California rules”:

“We’re setting a pattern for the future,” Cohen said. “Any company that is not assuming a constant rate of improvement in fuel economy and carbon emissions is making a big mistake.”

Detroit’s engineers may too be preparing real change, rather than counting on their lobbyists and Washington gridlock. Consider what one Chrysler executive told the online electric-vehicle oriented publication EV World at last week’s Detroit auto show. Bill Moore, EV World‘s editor, writes in his “EV World Insider” column this week that the unnamed exec credited the impending California standards as a key driver for Chrysler’s recent EV epiphanies. (There’s no link to those quotes just yet as Moore’s column is premium content; non-subscribers can read it here in about a month or, of course, subscribe).

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This post was created for the Technology Review Potential Energy blog

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One thought on “Major Automakers Spurred by California’s Higher Expectations

  1. If CA does impose the regulations, I hope that they put in place carbon/fuel taxes to induce customers to actually buy the higher mpg vehicles. This is the biggest problem in the US. Regulations are imposed on manufacturers to build high mpg vehicles (that have less power, less hauling capability, etc). Customers continue to enjoy cheap fuel (by European standards in any case) and, hence, continue to desire the less fuel efficient vehicles. If high mpg regulations go into effect, they should be combined with higher fuel taxes. Then you will see people flocking to the new high mpg offerings.

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