Opinion | Commentary - Distribution

Search Autoparts/Aftermarket-business/Opinion-commentary-distribution/

Next stage CAFE: A battle for OEMs, an opportunity for the aftermarket

Monday, September 12, 2011 - 00:00
Print Article

The next chorus of debate regarding auto fuel efficiency standards will be heard this fall when the Environmental Protection Agency (EPA) and Department of Transportation (DOT) publish their first draft of model year 2017-2025 corporate average fuel economy (CAFE) numbers for light-duty vehicles. President Barack Obama announced a conceptual agreement between auto manufacturers, environmental groups and his administration in July. That agreement set a target of 54.5 miles per gallon over each of the manufacturer’s offerings in 2025.

At that time, the parties publicly lauded the agreement, at least generally. Complaints were downplayed. But both sides – environmentalists and auto manufacturers – had some fairly significant reservations. Expect these differences to come into full flower when the Obama administration actually proposes its detailed plan this fall, probably at the end of September.

 

The 2017-2025 plan will come into play following an earlier 2012-2016 plan, announced in 2009, whose goal is to achieve a light-duty vehicle CAFE for each manufacturer of 35.5 mpg by 2016.

The apparent good feelings voiced by all sides at the time of Obama’s announcement of the second-stage standards on July 29, 2011, obscured what are significant reservations from car companies and groups such as the American Council for an Energy-Efficient Economy (ACEEE). The ACEEE, for example, noted that reaching the 2017-2025 standards would require vehicle manufacturers to produce more electric vehicles. That comes as no surprise, of course. That probably stimulated the deal between Ford and Toyota, announced on Aug. 22, that they would co-develop a hybrid powertrain system for larger, rear-wheel drive vehicles.

But the EPA and DOT, based on statements they have made in preparatory documents released since September 2010, plan to call electric vehicles “zero emission” vehicles, meaning they would receive credits against a manufacturer’s target CAFE because of a reduction in greenhouse gas emissions. “While this could be an effective incentive, it will increase gasoline vehicles’ emissions by more than the electric vehicles will reduce them,” notes ACEEE Transportation Program Director Therese Langer. “But as these vehicles reach the market in greater numbers, we cannot afford to ignore the power plant emissions associated with vehicle charging.”

PAGE 2

One of the features of the CAFE/GHG standards Obama announced July 29 is a “mid-term” review during which the president at that time will decide whether the original 54.5 mpg goal is too hard to reach. Auto companies sought that provision. But GM Chairman and Chief Executive Officer Daniel Akerson wrote to Transportation Secretary Ray LaHood and EPA Administrator Lisa Jackson on July 29 that GM “reserves all rights to contest final actions taken or not taken by EPA, NHTSA, and CARB as part of, or in response to, the mid- term evaluation.” Many of the CEOs of other automakers made exactly the same cautious commitments.

Clearly, the 2017-2025 CAFE standards will have a secondary impact on the aftermarket. But that impact could be significant because of the credits automakers can earn (thus reducing their CAFE targets) for use of new technologies. Those credits already come into play with the 2012-2016 standards for green AC refrigerants. Green refrigerant credits will hasten the use of HFO-1234yf first by OEMs, but consumer packaging will follow fairly quickly and that new refrigerant will become a staple on aftermarket retail shelves.

Similarly, the EPA and DOT will designate specific technologies that, if used by the OEMs, will earn them greenhouse gas emission reduction credits, too. Those could include such things as active grill shutters, electric heat pumps, high efficiency alternators, high efficiency lights and a number of other things. One can envision those technologies migrating quickly to the aftermarket as well.

The next chorus of debate regarding auto fuel efficiency standards will be heard this fall when the Environmental Protection Agency (EPA) and Department of Transportation (DOT) publish their first draft of model year 2017-2025 corporate average fuel economy (CAFE) numbers for light-duty vehicles. President Barack Obama announced a conceptual agreement between auto manufacturers, environmental groups and his administration in July. That agreement set a target of 54.5 miles per gallon over each of the manufacturer’s offerings in 2025.

At that time, the parties publicly lauded the agreement, at least generally. Complaints were downplayed. But both sides – environmentalists and auto manufacturers – had some fairly significant reservations. Expect these differences to come into full flower when the Obama administration actually proposes its detailed plan this fall, probably at the end of September.

 

The 2017-2025 plan will come into play following an earlier 2012-2016 plan, announced in 2009, whose goal is to achieve a light-duty vehicle CAFE for each manufacturer of 35.5 mpg by 2016.

The apparent good feelings voiced by all sides at the time of Obama’s announcement of the second-stage standards on July 29, 2011, obscured what are significant reservations from car companies and groups such as the American Council for an Energy-Efficient Economy (ACEEE). The ACEEE, for example, noted that reaching the 2017-2025 standards would require vehicle manufacturers to produce more electric vehicles. That comes as no surprise, of course. That probably stimulated the deal between Ford and Toyota, announced on Aug. 22, that they would co-develop a hybrid powertrain system for larger, rear-wheel drive vehicles.

But the EPA and DOT, based on statements they have made in preparatory documents released since September 2010, plan to call electric vehicles “zero emission” vehicles, meaning they would receive credits against a manufacturer’s target CAFE because of a reduction in greenhouse gas emissions. “While this could be an effective incentive, it will increase gasoline vehicles’ emissions by more than the electric vehicles will reduce them,” notes ACEEE Transportation Program Director Therese Langer. “But as these vehicles reach the market in greater numbers, we cannot afford to ignore the power plant emissions associated with vehicle charging.”

Article Categorization
Article Details
blog comments powered by Disqus