Although the emerging federal fuel economy agreement is less than they wanted -- and nowhere near their hoped-for 60 mpg standard by 2025 -- environmentalists and crucial California regulators say they can live with the 54.5 mpg standard likely to emerge out of continuing negotiations between the White House and carmakers.
The spin at The Truth About Cars is that Obama "caved" in the face of auto industry pressure, but actually he seems to have crafted a fairly good compromise that nobody actively hates. The proposal is definitely weaker than it was, but it's not fatally wounded. It would be nice if the deficit reduction talks went this well.
Loopholes a gift to industry
The proposal, leaked out of the talks, contains one very big loophole big enough to drive a lot of gas-guzzling trucks and SUVs through. And it includes many concessions for technology that you've probably never heard of -- and may never use.
Automakers, who would only speak off the record, agree that a handshake agreement is imminent, probably by the end of the week. They're signing on to 54.5, a number that's higher than they'd like, because the proposal as it stands contains both a mid-term review (in 2018) that could derail or weaken the whole program, as well as a slow mileage ramp up for the trucks that are still a profit center for Detroit.
Weird tech gets recognized
Another extraordinary aspect of the program that the Big Three like is the numerous "off cycle" automaker credits for fuel economy innovations that wouldn't show up in the normal federal fuel economy tests. Some of this stuff is kind of arcane. Actually, a lot of it is arcane. Automakers will get credit toward 54.5 mpg by including:
- Active grille shutters, which close when the car reaches a certain speed for better aerodynamics.
- Solar roof cells, which generate electricity but not a whole lot of it -- i.e., automakers use solar panels to circulate air in the car when it's parked.
- Thermo-electric waste exhaust. Some heat is recaptured and used to create a small amount of supplemental power.
- Active transmission warm-up. Your guess is as good as mine on how that works, but a warm tranny is a more efficient one.
Some of these things are sketchy, and on others its unknowable if they'll really provide significant benefits. With a solar panel, for instance, it matters how you use your car. Will you park it in a garage? Under trees? In other cases, as with high-efficiency lighting, they're giving carmakers credit for technology that's already widespread on vehicles.Roland Hwang, transportation program director at the Natural Resources Defense Council, says the full scope of the proposal will only be clear after the fine print is available. "There are certainly aspects that are encouraging but there are potential loopholes which could be troubling," he said.
A cautious nod
Carmakers are still going over the details, too. One auto informant told me:
We're still poring over the proposal. It's pretty complex, and there are some arcane issues still to be dealt with, but everybody wants to get to the point where we have an agreement in principle in the next few days.The loophole for trucks is key from their point of view. Cars will have to improve five percent a year between 2017 and 2025, but light trucks only have to move 3.5 percent annually until 2022, when they too go to five percent annually. That alone moved the standard from 56.2 mpg to 54.5.
Whose ox is gored?
The final details of the plan are important, because they determine how automakers' specific vehicle programs will be affected. Ford, for instance, has just introduced the new F-150 truck and it quickly became the bestselling vehicle in the U.S. It is also selling a lot of F-150s with fuel-efficient EcoBoost engines, but it doesn't want to pay big penalties for trucks with V-8s.
The industry's big fear is that the final agreement with big breaks for SUVs will be too weak to satisfy California regulators, who have the ability to break away and create (with 12 other states) their own fuel economy regulations. The main reason carmakers didn't demand more than they did is because it could blow apart California's participation. But Stanley Young, a spokesman for the California Air Resources Board, told me it's not likely that the state will go rogue:
The standards are still in development, but we like the direction they're heading. We see effective incentives to advance clean technologies.If California is happy, everybody else is likely to be, too. The final agreement won't be released until September, but the broad contours are already in place and probably won't change much. What you see now is what you're likely to get.