The National Automobile Dealers Association pegs the 2009 average price of a vehicle at $29,000. Adjusted for 2025 dollars, the actual price in the CAR model could be close to $50,000, thereby causing total industry sales to be about 13 million units, roughly 4 million lower than they could be.
The current corporate average fuel economy standards of 27.5 mpg for passenger cars and 23.5 mpg for pickup trucks and sport utility vehicles increases to 35.5 mpg for cars and trucks on a combined EPA average by 2016.
Automakers agreed to this when the Democrats swept the Republicans out of power in the presidency and both houses of Congress during the last presidential election, after decades of successfully lobbying against increases. Higher fuel economy, simply but, means more independence for inhabitant of the U.S. – We the people.
The balance of power has now shifted back to the Republicans because of the midterm elections, as voters detected none of the “change you can believe in,” that President Obama promised, and the economy foundered abetted by Republicans, setting up yet another confrontation between the bickering politicians currently on display as the lame ducks posture along the banks of the Potomac river.
Cuban Auto Syndrome Coming Here?
From an ecological point of view, the price increases actually have the perverse effect of hurting the environment, as consumers will be forced to hold onto cars longer and the car market stagnates, according to the CAR analysis.
This argument, if it is even remotely sound (and it appears to be plausible ,but over-hyped on my first analysis since all the assumptions are clearly defined and data based, with historical consumer trends included, unlike the NHTSA and EPA estimates about the cost of fuel economy now under consideration) is a powerful counter to the “eco-babble” about creating green jobs so beloved by mostly Democrats, including the outgoing Governor of Michigan, Jennifer Granholm.
The term-limited Granholm this January after eight years leaves a bankrupt state government to incoming Republicans, who carried the election in all three branches of the ruling apparatus of what was once the heart of the auto industry.
The incoming Republican Governor, Rick Snyder, was long on platitudes about job creation during the campaign, but short on actual policy recommendations as to how to create jobs, critics contend, while also noting, with apparent 100% accuracy, that this is case at the national level. Ultimately, everywhere you look, the overriding voter concern appears to be job creation, and disgust with pork barrel politics as usual, a trend that, arguably, bodes ill for both parties. Eventually, AutoInformed wagers, Snyder will slither off into oblivion.
Three corporate average fuel economy increases were modeled by CAR:
1. 41.7 mpg – This is an admittedly low CAFE target that was looked at if consumers and the industry negatively respond to the 2012‐2016 standards.
2. 49.8 mpg – This represents approximately a 4.6% annual CAFE increase, which is roughly equivalent to a continuation of the 2012‐2016 regulation now in place. It also is between the 3% and 5% annual decreases in green house gas (GHG) emissions scenarios proposed by EPA/NHTSA.
3. 60.1 mpg – This high-mileage scenario comes from political representatives in California and other state as well as some environmental pressure groups. It is close to the ‐6% a year decrease in annual GHG emissions scenario proposed by EPA/NHTSA.
While making no policy recommendations, McAlinden did suggest that more attention needs to be paid to the underlying economics by politicians and regulators.
“We do recommend more serious consideration of future costs,” McAlinden said.
Yes, but Big Oil has ruled politics for far too long to the detriment of the economy and the environment.
