A recent mini-scandal reveals what many drivers have long suspected: The gas mileage claims listed prominently on the windows of new cars can be overstated. Unfortunately, this may not be an isolated incident.
The acronym “EPA” is featured on the mpg ratings of new car stickers, but the Environmental Protection Agency does not conduct fuel economy tests on all vehicles. Instead, according to the Associated Press, how things work is that automakers do their own tests, and “the EPA enforces accuracy by auditing about 15 percent of vehicles annually.” Obviously, this system opens up the possibility that automakers could be inflating their vehicle mpg ratings, purposefully or “by accident.”
After receiving complaints from drivers about the fuel economy of the 2012 Hyundai Elantras, the EPA conducted an audit, which exposed the fact that the majority of 2012 and 2013 Hyundai and Kia models had inaccurate, inflated mileage ratings. For most of the affected cars, sticker ratings had to be lowered by a mere 1 mpg or 2 mpg. The Kia Soul Eco, however, is now rated at 29 mpg on the highway, down 6 mpg from the 35 mpg that used to be listed on the window. That’s quite a bump, one that’ll be noticed by drivers who take fuel economy into consideration when choosing a new car—and who doesn’t do so nowadays?
Back in 2011 (July 29, 2011), President Obama announced an agreement with car manufacturers* and the automotive industry union* to increase gas mileage requirements for new vehicles sold in 2025 to 54.5 mpg. This is a fleet wide average requirement for all cars and light trucks sold in that year. This average is the mean mpg value of all models sold by the major automotive manufacturers** who together are responsible for 90% of light vehicle sales.
Because it’s the average of all models, there is a built in flexibility where some vehicles can attain less than the 54.5 mpg while others attain more. To further enhance this flexibility, the target mpg is tied to vehicle size, so that larger cars and light trucks requirements can be lower.
Keep that in mind while you read the Fox News spin on an old but new story.
“The recommendations call for ‘fleet wide’ gas mileage of 54.4 miles a gallon by 2025 — essentially the average gas mileage for cars, trucks, vans and all other vehicles in a model year.”†
Of course there is no obvious, glaring lie in the article, but the implication is clear, especially given that most people do not pay attention to how averages work and are likely to assume the 54.5 mpg is required of all models. The spin put in the article also implies that all vehicles made in that year are subject to the standards, including all commercial vehicles, which by definition are not light duty trucks***.
No Fox News fear mongering would be complete without a few bogeymen thrown at the readers, so Fox makes sure they highlight the EPA, every Fox sycophant’s favourite environmentalist conspiracy, as the source for the standards.
“The Environmental Protection Agency and National Highway Traffic Safety Administration submitted their proposed 2017-2025 fuel-efficiency recommendations in mid-July to the administration’s Office of Management and Budget.”†
Because the standards were recommended by the EPA, they can be rejected out of hand as Warmist propaganda.
Interestingly, Fox actually mentions part of the benefit of increased fuel economy for consumers, but frames it along with a speculated increase in cost for new vehicles and conveniently forgets to do the math.
“If approved, the changes are projected to save average American motorists roughly $8,200 at the pump over the life of their vehicles, but would also cost them as much as $3,000 more for a new vehicle.” †
A big ‘say what’ moment comes up right after Fox tells us that the standards will save the average new car buyer $8200.00 over the life of the vehicle. Even if the cost is $3000.00 higher for a new car, speculation at best, the savings is still $5200.00.
“One major concern is whether buyers will be able to get a loan, which critics of the proposal say would hurt Detroit automakers, including Chrysler and General Motors, who needed billions in taxpayer-funded bailouts during the recession to stave off bankruptcy.”†
You read that one right. The buyers will not be able to get a loan, so they won’t be able to buy the car. Suddenly Fox is concerned with the 99%? Give me a break. Loan companies are there to make money, the larger the loan, the larger the profit. People without the means do not buy new cars. That’s a fact now and it will be a fact in the future.
For a publication that continually tells us the climate isn’t changing but if it is, future technology will fix everything, they sure ignored the potential for cost savings of future technology.
What all this comes down to, is that the Oil industry does not want higher fuel economy, or the recognition that emissions matter, because it will cut into their fuel sales and thereby reduce profits. Either they put pressure ($) on Fox to spin the hell out of this story, or Fox is hoping for payback from the Oil industry for blowing smoke up your keister.
*”auto manufacturers, the State of California, the United Auto Workers (UAW), national environmental organizations, and other stakeholders.”
Paula Latshaw is eager to get behind the wheel of her new Lexus CT 200h hybrid at Sewell Lexus in Dallas. But first, she needs some training.
Her new car isn’t the most technologically advanced car Lexus sells, but the navigation system, the voice-controlled hands-free phone system and the multiple radio options are challenging enough.
Auto dealers are using tech tutors, sometimes hiring them from the Apple genius bar, to help train car buyers on how to use a car’s infotainment system and other technology. Joe White on Lunch Break looks at how the tutorials are going. Photo: Lexus.
“I’m not used to GPS at all,” Ms. Latshaw says. A former BMW owner, she confesses she “worked on daylight-saving time all year last year” because she couldn’t figure out how to reset the German car’s clock.
Customers like Ms. Latshaw are why Sewell has Alex Oger, the dealership’s first “technology specialist.” Mr. Oger, a is on the leading edge of new efforts by auto makers and dealers to close the skills gap that prevents many customers from appreciating the sophisticated digital systems on board many new cars.
Cars are more expensive than ever, and experts say even higher prices are on the way.
The days of big cash-back offers and other incentives that automakers depended on to sell excess cars and trucks have gone the way of manual transmissions and roll-down windows.
“The industry has essentially cleansed itself of high incentives,” said Jeff Schuster, senior vice president of auto research firm LMC Automotive.
The deep cuts in production capacity during the restructuring of recent years, coupled with the recent rebound in demand for new cars from consumers, means that shoppers can’t find the deals they once did.
“You’re going to see pricing going overall higher,” said Jesse Toprak, analyst with sales and pricing tracker TrueCar. “The demand is higher and supply is more tightly controlled.”
TrueCar estimates the price of a typical car or light truck reached a record high of $30,748 in March, up nearly $2,000, or 7%, from a year earlier.
Prices have been steadily rising over the last three years, since sales and prices both plunged during the darkest days of the recession as General Motors (GM, Fortune 500) and Chrysler Group tumbled into bankruptcy.
“You’ll still see some summer sales, but we’ve been adding about $1,000 a year to prices over the last several years,” said Toprak. “There’s no reason to think that trend line is going to turn around, even if it slows down a little bit.”
“Cash for clunkers” was wildly popular when the federal government instituted the vehicle trade-in program in the summer of 2009. Congress first earmarked $1 billion to lure drivers out of their old gas-guzzlers onto depressed car lots and into new fuel-efficient vehicles. Designed to run between late July and early November, the program burned through that money in a week. It ended less than a month later, after 678,359 new cars were purchased in exchange for $2.85 billion in government rebates.
In the midst of the program, Barack Obama lauded the dealerships it was reviving, the fuel savings it was generating for consumers and its impact in “getting the oldest, dirtiest, and most air-polluting trucks and SUVs off the road for good.” A General Motors executive was even more glowing: “I can’t remember too many programs that it’s hard to find anything negative about.”
In retrospect, though, a popular program (which still had its critics) isn’t the same thing as an effective one. And a new paper concludes that “cash for clunkers” did little for either of its true intended beneficiaries (beyond those 600,000 happy customers, that is): the economy and the environment.
In a newly updated study from the think tank Resources for the Future, Shanjun Li, Joshua Linn, and Elisheba Spiller examined the program against a counterfactual world where it never existed, drawing on trends at the time from Canada. They looked at the total sales from the program (a reflection of its economic impact) and at the composition of the vehicles sold (a sign of environmental impact, based on improvements in fuel economy).
As critics of the car-rebate plan warned at the time, many of the people who took advantage of the program were on their way to buying new cars anyway. The researchers found that 45 percent of participants would have bought new cars in July and August whether the program existed or not. The rest of these people likely would have bought cars at some points later in 2009, but thanks to the promise of a $3,500-$4,500 rebate, they bought them while this deal was on the table.
“There’s enough of those consumers that that was the effect of the program,” Linn said. “There were a couple hundred thousand of these consumers who would have purchased in September or October and instead purchased in July or August.”
This means the program didn’t give much of boost to the auto industry - or the larger economy - beyond concentrating several months of car-buying demand into the program’s brief lifespan. This has been one of the key criticisms of clunkernomics.