The government’s pending (2016) 35.5 MPG CAFE fuel economy
requirements — which for the first time apply to trucks as well as
passenger cars — are going to make it very difficult for any
automaker to sell trucks in volume in this country.
Ford has just dropped the compact-size Ranger from its
U.S. model lineup — making it the first CAFE casualty — and I
predict that larger trucks are on the endangered species list now,
too. Just as large V-8/RWD sedans were almost completely killed off
as mass-market vehicles by the original — and far less punitive —
CAFE requirements that went into effect a quarter century
ago.
Even a small truck with a four-cylinder engine will have a
hard time averaging 35.5 MPG. To get there, the truck
would need to be capable of 40 MPG on the highway and 30 MPG in
city driving. There are only a handful of economy cars
that achieve 40 MPG on the highway right now. Trucks do worse,
MPG-wise, because they’re heavier (to be able to do work such as
pull a trailer or carry a pallet of bricks in the bed), less
aerodynamic, in part because they need to ride higher off the
ground than a car — and often, ride on M/S-rated tires that have
higher rolling resistance than standard passenger car radials. Fuel
efficiency takes a back seat to capability.
The just-canceled Ranger managed 23 city, 27 highway —
so, about 25 MPG average. For a truck, that’s not bad. But Ford
would have had to get another 10 MPG out of Ranger to make the CAFE
cut — and avoid CAFE fines. I suspect Ford dropped the Ranger from
its U.S. product portfolio because it realizes that getting a truck
(any truck) to achieve 40 on the highway and 30 in city-type
driving will probably — almost certainly — require:
• A dramatic reduction in weight via the use of composites
rather than steel while maintaining the same level of
crashworthiness.
• Very high-efficiency turbodiesel engines or other
advanced technology, such as a hybrid powertrain.
• Significant reduction in power/capability.
All of which will increase the cost of the vehicle,
perhaps to the extent that it is no longer economically viable to
manufacturer. The Ranger got nixed first in part because it’s a
lower-on-the-totem-pole model than the best-selling F-Series. But
CAFE is gunning for the F-truck, too. It gets considerably poorer
fuel economy than the Ranger, which will make it that much harder
(read, economically untenable) to achieve compliance with the 35.5
MPG CAFE diktat.
Even the government’s own estimates of the costs imposed
by CAFE so far are startling high: $2.4 billion — and that was
back in 2003, when the Congressional Budget Office issued
its
report, The Economic Costs of Fuel Economy
Standards Versus a Gasoline Tax. Mind, the $2.4 billion
referenced by CBO assumed the old CAFE standard of 27.5 MPGs, not
the recently enacted 35.5 MPG standard — which also for the first
time applies to trucks. The old CAFE standard was much more
lenient, with a separate — and higher — CAFE peg for “light
trucks.” The CBO study also noted, presciently, that “unit sales of
light trucks would ultimately decline about twice as much as would
those of cars.”
So what will the new 35.5 MPG standard cost us?
Automotive Fleet Magazine, an
industry journal, estimates it will
add at least another $1,000 to the sticker
price of every new vehicle sold and $52 billion
cumulatively.
And don’t forget : CAFE does not stop at 35.5 MPG by 2016.
Chief Engineer Obama pushed for — and got — a further bump to
between 47 and 62 MPG by 2025.
Want to take a guess what that will
cost?
The Chevy Volt sort-of electric car gives us a
clue.
It is capable of operating on electricity alone for 20 or
30 miles at a stretch and so uses very little gas. It also has a
sticker price of $40,000. Even with a massive federal subsidy of
$7,500 the thing still costs about as much to buy as a new BMW 3
series or similar entry luxury-vehicle. It’s thus a toy, or at
best, an engineering concept. Whatever you’d like to call it, it’s
not economical — and few people, other than affluent
people, can afford to buy one. It is doubtful GM would have even
produced the Volt for retail sale absent the PR value — and, of
course, government subsidies.
With trucks, it’s even worse, because to a great extent
the market for such vehicles is middle and working class. There are
people in San Francisco and Washington with $200k annually incomes
who will buy the Volt. But how many $40k-per-year electricians will
be willing or even able to plunk down $30,000 for a “high
efficiency” compact truck, as outlined above? Hence Ford’s decision
to pull the Ranger from its U.S. model lineup — while
continuing to sell it in other countries where there is no CAFE
law.
It’s an impossible situation for the car companies. You
can’t have both very high fuel economy and the capability people
expect at a reasonable cost, while also meeting all the
government’s existing crashworthiness standards, too.
The latter is especially interesting because, for the
first time, two mutually exclusive government edicts — one
relating to fuel economy, the other relating to crashworthiness —
are coming into obvious conflict. It would be relatively easy to
chop a few hundred pounds off the typical truck and without doing
anything else, score a significant increase in fuel economy. It
would also be possible, with a lower curb weight, to use a smaller
(or less powerful) engine and still maintain approximately the same
performance while further increasing fuel economy (by dint of the
fact that a smaller, less powerful engine would use less fuel).
This would also have the happy effect of lowering the price of the
vehicle since it costs nothing to remove weight, or equipment that
adds weight, such as the now-mandatory multiple air bags that all
vehicles come equipped with.
But maintaining the vehicle’s compliance with existing and
pending federal crashworthiness requirements while also
significantly reducing its curb weight won’t be easily or cheaply
done. It will probably require wholesale re-engineering of the
vehicle, not merely replacing steel with high-strength, lightweight
(and very expensive) composites. Major R&D will be involved and
the end result, though possibly both “safe” and “efficient” will
also cost a small fortune, just like the Chevy Volt.
The people on the top floor of the Ford building are not
idiots. They’ve crunched the numbers. They see the future. There is
none for the Ranger — and soon, bigger trucks, too. Bet your
bippie GM and Chrysler are hip, too.
I predict it’s all over for trucks as mass-market
vehicles.
We just don’t realize it yet.
