Now we know why the automakers weren’t screaming over the CAFE rules

When Transportation Secretary Mary Peters announced the first round of new CAFE rules last week, there was nary a peep from the automakers who had complained so vociferously about the the 35mpg standard in the first place. Now there is a clue as to why they have been so quiet. Until now, the fuel economy rules have always been pretty simple. There was a threshold for each model year (currently 27.5mpg for cars) and the sales weighted average for all cars sold by a manufacturer had to beat that level. All companies had the same threshold. If they fell short they paid fines and if they exceeded it they could earn credits towards future years.

Now it’s much more complicated. There is a sliding scale based on the footprint of each individual vehicle. The footprint is defined as the wheelbase times the average of the track width or the area within the wheels. The larger the footprint, the lower the threshold that vehicle has to meet. Therefore for two cars of similar overall size but one with a longer wheelbase, the longer one would have a lower mileage requirement. Each automaker is then assigned an individual threshold to meet based on the sales weighted average footprint of the vehicles it sells. A company that sells more large footprint vehicles would have a lower hurdle to jump. One that sells predominantly smaller cars would have to get better mileage. As a result a company like Porsche or Ferrari who sell relatively small sports cars would have to meet a higher standard than Ford or General Motors who sell more large trucks. The entire premise of this rule is absurd. This rule will likely have the effect of giving manufacturers an incentive to maximize the wheelbase and track of new vehicles in order to minimize their CAFE requirement.

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