DETROIT (July 29, 2016) — The federal government's draft report on the auto industry agreement on fuel economy and greenhouse gas emissions provides a helpful reminder of what happens when auto makers and regulators have the courage to question their assumptions.
And it underscores what we've known all along: The industry, when it resolves to, has tremendous capacity to overcome difficult obstacles.
Even if auto makers entered into the agreement in 2011 grudgingly, their pursuit of its objectives — judging by the report — has been energetic. “The industry, on average, is over-complying with the first several years of the National Program,” regulators said in the report, noting rapid advances in efficient powertrains, aerodynamics and lightweighting.
That's not to say progress has been easy. Hitting the ever-tighter targets requires costly investments in technology and some gambling on which technologies consumers will embrace. Not hitting the targets is about to get costlier, too.
But meaningful progress is being made. That's because the industry seized the opportunity to question its assumptions about what's possible.
Regulators also are revisiting their assumptions, a big reason why the National Program is so groundbreaking. The agreement, which went into effect starting with the 2012 model year, was forged at a time when gasoline cost closer to $4 a gallon than $2 it hovers near now. It envisioned a U.S. model mix dominated 2-to-1 by cars. That no longer computes. So the projection of a 54.5-mpg light-vehicle fleet by the 2025 model year will be reset to reflect a more even car-truck split.
It's possible that this draft report will become a political football contested by the environmental lobby and opponents of federal regulation.
Regardless of the political tussling, it's worthwhile to recognize how far the auto industry has progressed since 2012 on improving vehicle fuel economy. A well-reasoned, data-driven regulatory standard that is plenty strict, attainable and sustainable in the marketplace is a victory for both the auto industry and U.S. society.
This editorial recently appeared in Automotive News, a Detroit-based sister publication of Tire Business.