Both the Bush and Obama Administrations implemented tougher fuel efficiency standards for vehicles with the message that more stringent regulations will reduce carbon dioxide and save consumers money because they’ll be purchasing less gas. The Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) recently announced fleet-wide requirements of 34.1 miles per gallon in 2016 for all automakers in the U.S.
Now, are the agencies trying to guilt you into buying a hybrid? The Wall Street Journal reports:
The government proposed labeling each new passenger vehicle with a letter grade from A to D based on its fuel efficiency and emissions, part of a broader effort by the Obama administration to promote electric cars and other advanced-technology vehicles.
Currently, the labels must show how many miles per gallon a car gets and its estimated annual fuel cost. Under the proposed changes, a new label design would carry a large letter grade assigned by regulators.
Under the system, the only cars that would receive an A-plus, A or A-minus would be electrics and plug-in hybrids, the government said. Many compact and midsize vehicles would get Bs, while bigger and more powerful models such as sport-utility vehicles and pickup trucks would get Cs or C-minuses because they burn more petroleum and pump out more carbon dioxide, officials said.
The proposal is unnecessary and degrading to consumers who already have the information they need to purchase the vehicles they desire. Consumers have different preferences and different needs and take a number of variables into account when buying a car. Size, safety, miles-per-gallon, costs of repairs, location, and price (among others) all play important roles, and each carries a different weight per individual. Should the EPA and NHTSA arbitrarily assign grades to all these factors? There’s also a conflict-of-interest issue that arises: Should these regulatory agencies be picking winners and losers among the models and manufacturers they regulate?
So why the obnoxious letter grade? Just as no child wants to come home with a report card full of C’s, consumers could feel guilty rolling out of a dealership with a C-minus SUV. Dave McCurdy, president of the Alliance of Automobile Manufacturers, said, “The proposed letter grade falls short because it is imbued with school-yard memories of passing and failing.”
Unfortunately for automakers, more stringent fuel efficiency regulations do not come with guaranteed consumer demand for those vehicles. Gloria Bergquist, also from the Alliance of Automobile Manufacturers, said, “We have a hill to climb, and it’s steep, so we will need consumers to buy our fuel-efficient technologies in large numbers to meet this new national standard.”
Bob Lutz, vice chairman of GM, echoed Berguist’s remarks, saying, “We’ll have to force a lot of hybrids, which people may or may not pay for.” Consumers have a wide variety of choices when it comes to purchasing a vehicle; clearly, a number of smaller, fuel-efficient cars exist on the market today—including a growing number of hybrid vehicles. Yet Jake Fisher, senior automotive engineer at Consumer Reports, asserted, “Performance hybrids and mild hybrids haven’t gained any traction in the market.” The EPA and NHTSA’s lettering system is an attempt to persuade reluctant consumers into buying those vehicles.
Another problem is that advertising the cost savings from increased fuel efficiency relies only on government numbers. While the Obama Administration acknowledges higher sticker prices for vehicles, they may underestimate those increases. Last year, President Obama said consumers would be better off paying $1,300 more for a new car because they will save $2,800 through better gas mileage. However, some estimates place the price hikes much higher. Sandra Stojkovski of See More Systems, which specializes in systems engineering, “projects the sticker of a compact car will go up $1,800 to $2,000. The price of a mid-sized car is likely to increase $4,500 to $6,000, she says. Outfitting a full-sized pickup with a diesel, rather than a gasoline-powered V-8, and other new equipment could cost $9,000.” One should also consider the energy electricity used and output of emissions when charging an electric vehicle.
Consumers already have access to the miles-per-gallon numbers, which is much less arbitrary than any grading system. They can do without the Hester Prynne–style marking.