CAFE Spells RIP for Trucks - The American Spectator | USA News and Politics
CAFE Spells RIP for Trucks

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.

Eric Peters
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