Affordable V-8 muscle cars and some of the thirstiest trucks may again be living on borrowed time after this week. Or these American favorites might become more expensive, because the economics of building and selling them in the U.S. market have just been upended.
To avoid running through a maze of numbers, it?s essentially this: Selling a full lineup of vehicles today involves some complex calculations. If automakers make too many vehicles with low fuel-economy ratings, they need to balance that out with enough high-efficiency models like hybrids or plug-in vehicles. And if they don?t get that balance right and sell too many cars with low mileage, they?ll be hit with a federal fine?one that just increased by more than 150 percent.
While nothing else has changed yet about the way in which the federal government?s Corporate Average Fuel Economy (CAFE) program is calculated or enforced, in an industry that?s used to making some cost/benefit calculations about product mix and what to keep building, this could change the business case behind building entire vehicle lines or powertrain variants. Serving Its Purpose, Or Not"
The news about the fine hike?s effect on the auto industry broke this past weekend, before the release of the EPA?s technical assessment report that for the most part applauded automakers for meeting standards that were rapidly phased in beginning in 2012. The latter release is part of a midterm evaluation of the current CAFE standards, looking ahead ...