Last week we wrote about the Department of Energy (DOE) wastefully spending $45 million in taxpayer dollars on advanced transportation technologies. The federal government spending taxpayer dollars on activities the private sector should be financing is nothing new, but another big part of the problem is that these investments stem from unnecessary government regulations in the first place—namely, fuel efficiency standards.
Last year the Obama Administration finalized corporate average fuel economy standards for cars and light-duty trucks. The new rule requires an average fuel economy of 54.5 miles per gallon for 2025 model year vehicles. Not only will these new regulations drive the upfront cost of vehicles and restrict consumer choice, but they are going to be difficult for auto manufacturers to meet. Sales of electric vehicles are low, and lighter weight materials in vehicles increase costs.
So, to assuage the concerns of auto manufacturers, the government is throwing money at different technologies such as advanced batteries, lightweight materials, and more fuel efficient air conditioning systems.
For American consumers and taxpayers, it’s one Washington-created problem trying to fix another: Restrict your product choice with stringent regulations, and then spend your money to help these companies meet these regulations.
The latest $45 million in DOE spending and fuel efficiency standards ignore the fact that auto manufacturers, not the federal government, are much better equipped to meet the demands of consumers and the federal government. A better solution is to remove the government’s ability to tighten fuel efficiency standards, which would remove the need for the government to spend taxpayer dollars trying to push technologies through the market.
There is nothing wrong with more hybrids, electric vehicles, or other alternative vehicle technologies making their way to the market. A diverse fuel supply will drive competition, but only when that process is driven by the market will it make consumers better off. If not, manufacturers may be forced to make a bunch of cars no one wants to buy, and America’s auto industry will be right back where it was a few years ago.
Politicians want to dictate how our economy runs, and doing so costs us as taxpayers and consumers.