Why does 54.4 mpg mean something more like 37 mpg?
At the most recent LA Auto Show, Hyundia North American CEO John Krafcik essentially mocked the hype around plug-in vehicles at the show while debuting the Hyundai Elantra — the kind of car Krafcik claimed was the future of the auto industry. According to Krafcik, even if the government passed 62 mpg by 2025, Hyundai would be able to meet that requirement without much reliance upon batteries.
Since 54.4 mpg, rather than 62 mpg by 2025, actually means something more like 37 mpg in terms of EPA window stickers, will batteries be the key to meeting new CAFE requirements by 2025?
It seems too early to tell. Compact cars, for instance, should be able to achieve these new CAFE requirements without battery technologies. Larger sedans, however, it seems will need some kind of battery technology. The real question, however, is pickup trucks, SUVs and crossovers.
Of course, new CAFE requirements are much easier on pickup trucks than passenger cars through 2020, and the ‘mid-term’ review could squash much higher pickup truck requirements before enacted. However, if the new CAFE requirements stick, it seems obvious that full hybrid technology, minimally, will be required for trucks. Perhaps even plug-in technologies.
And that begs the question, if battery technologies significantly increase the upfront costs of truck-based vehicles, will most pickup truck consumers simply stop buying them? Similarly, will consumers give up larger sedans in favor of better-than-ever compacts?
The recent success of the Chevy Cruze, for instance, as well as Hyundai’s LA Auto Show statements seem to suggest that when all is said and done, most consumers will probably just downsize. Such a move will simply be cheaper for consumers up-front, and more profitable for automakers.
If consumers simply downsize, then hybrid and plug-in technologies won’t be the dominant powertrains of the future, at least not by 2025, although they will achieve much higher market share than today. Therefore, the key to the future might not be batteries, but vehicle size.
On the other hand, if scale can drive down battery costs enough, maybe Americans won’t just drive small cars, but small battery-powered ones.
Of course, the Saudi king might die next year, causing an uprising in the Middle East that drives gasoline prices beyond $5.00, and 2025 CAFE requirements will instantly be irrelevant.
Anyway, it still really bugs me that 54.4 mpg doesn’t mean 54.4 mpg. Loopholes are bad enough, but when we can’t use simple and transparent numbers, it makes CAFE itself seem like one big loophole. And, let’s be honest, CAFE is a bit of a loophole, for if automakers didn’t accept new CAFE requirements, states like California were primed to make the auto business far tougher with significantly more stringent requirements.