The Obama administration’s reported proposal of a 56 mpg fuel-economy mandate by 2025 sets up an inherent conflict of interest for a government that has given away hundreds of millions of federal dollars to companies manufacturing batteries for electric cars.
“Carmakers say the proposal would effectively require most new vehicles sold in the U.S. to be battery-powered by 2025 and raise prices by thousands of dollars,” reported the Wall Street Journal Monday. “Makers of electric vehicle technology say declining costs for lithium batteries will allow the auto industry to make big gains in fuel efficiency.”
Those manufacturers are dependent on huge federal infusions of cash — as well as the federal purchase of electric vehicles in order to stay in business. The Obama administration, in other words, is mandating an artificial mpg standard to guarantee a market for its investment.
“Regarding the feds and the auto industry, conflicts of interest that used to be the exception are now the rule,” says Sam Kazman of the Competitive Enterprise Institute, a longtime critic of federal fuel mandates.
Since the 2009 stimulus bill passed, Washington has “invested” over $100 billion in giant corporations to realize Obama’s dream of transforming America into a green economy. Billions have been targeted at lithium-ion auto battery suppliers including $250 million to A123 Systems, $160 million to Dow, and $150 million to LGChem — in addition to $600 million for GM, Chrysler, and Ford combined.
Currently, no single vehicle achieves the 56 mpg standard. Indeed, the average auto is nowhere near the mandated fleet average mpg standard of 35.5 mpg mandated by Obama in four short years. But industry insiders acknowledge that number is fictional and will be heavily subsidized by credits to companies that build electric vehicles — whether the public buys them or not.
The industry is protesting the rule, saying it would inflate vehicle prices by $6,000 or more. But automakers are also resigned to the new green authoritarianism and have vigorously sought taxpayer subsidies to build the cars the government wants — as well as insuring that government will buy the vehicles when they roll off the assembly line. To date, hybrid-electrics are a small niche of the market occupied mostly by wealthy, image-conscious buyers.
Already this year, Obama helped the automakers towards meeting federal standards by promising that the feds will only fill their 600,000 vehicle fleet with hybrid-electrics.
So another copy editor at the newspaper where I work part time put this story on the business page last night as a brief, meaning he cut it down to one paragraph. I read the brief when I proofed the page. The last sentence read something like this: The savings on fuel will offset the higher cost of the cars. It was not attributed. I said to him, "Who says?" He said that it only made sense. As I was walking away, I commented to him that it seemed an outlandish statement to make because no one can predict what fuel or vehicles or batteries will cost in 2025. It's tough to be a conservative in a newsroom today.
Reply to this commentLinkReport AbuseThere is an error in this piece: The fuel economy figures used for these standards are EPA "unadjusted" figures that consumers don't normally see. They are the values measured in EPA testing that are adjusted downward substantially to give the real-world "sticker" fuel economy. For example, a 2011 Civic Hybrid has a sticker of 40 mpg, but the unadjusted EPA fuel economy is 58.8 - it does already meet the proposed 2025 standard. Prius is even higher. These figures can be accessed on the fueleconomy.gov website, but you have to go into their datasets, available in Excel. It will be a challenge, no doubt, but meeting these standards will save fuel for your grandchildren and their children - conservation of resources should not be a liberal v. conservative issue.
Reply to this commentLinkReport AbuseForcible "conservation" of other people's resources is most certainly a conservative vs. liberal issue.
Conservatives do not believe themselves, or anyone else, entitled to point government guns at others to force them to conserve the way we want them to, regardless of whether it is justified by talking about our grandchildren. Our grandchildren may have more fuel in the ground due to this coercion, but they will have less money, less of the technological progress the money would have bought, and most certainly less freedom.
Reply to this commentLinkReport AbuseYes, because the materials for "green cars" are so much more available than good old fashioned oil.
Or not.
Is this administration pro-American or pro Chinese?
Reply to this commentLinkReport AbuseGood luck finding a new vehicle with a V8 (or even a V6) in a few years. Even in pickup trucks, they are going to get rare and pricey.
The new Ford Explorer doesn't have a V8 (not even an option). The upcoming Chevy Malibu (a midsize sedan) will not be offering a V6 anymore. I seriously don't think that demand for vehicles with those size engines aren't popular, but are happening to fit CAFE and nothing else. All that will happen is those two models will be lower selling then the ones before them.
Reply to this commentLinkReport Abuse