Henry Payne writes in today’s WSJ on the consequences of new manufacturing techniques to meet EPA fuel-efficiency standards. The opener:
Fuel-Efficiency Rules Are Already Raising Costs in Detroit
Electric cars are a sideshow. The real story is Ford’s big bet on aluminum and other expensive design changes.
At the dawn of 2014 the federal government has exited General Motors and Chrysler. Both companies have repaid their auto-bailout loans and Fiat is purchasing Chrysler outright. But federal carbon limits imposed on the auto industry in the depths of the Great Recession—when it was powerless to resist—will haunt manufacturers for years to come. The re-election of Barack Obama has cemented EPA fuel-efficiency regulations requiring that, by 2025, auto makers’ products average 54.5 miles per gallon.
On the floor of the 2014 Detroit Auto Show, which is open to the public until Jan. 26, there is ample evidence that the regulations are starting to bite. Detroit temperatures have hovered in the single digits after hitting a record low, minus-14 degrees, in the first week of January—temperatures consistent with a planet that hasn’t warmed in more than a decade. Yet the gods of global warming must be satisfied, and the sacrifices to the EPA’s climate ideology come with a big price.
While auto makers are once again parading cars and trucks their customers want to own, company strategies are nevertheless being driven by government fuel-economy rules. Behind the glitzy displays, gorgeous vehicle introductions and relief that vehicle sales are almost back to 2007 prerecession levels, there is worry about the costs the fuel-efficiency rules impose.
Take the radical, expensive redesign of the Ford F150 pickup, America’s best-selling vehicle. The F150 is the talk of the show because it is the first truck—and the first large-volume vehicle—to have its body made entirely of aluminum to save weight and reduce fuel consumption.
The driving force behind Ford’s decision was the EPA standards that will force full-size trucks to get upward of 30 mpg in 10 years—up from 20 today. Ford had already made significant gains in efficiency by redesigning its powertrains to add less-thirsty turbo V-6s to its lineup, but the step to aluminum is an indication that the EPA rules will require much more than squeezing engines. The switch to costlier, lighter aluminum means a massive capital investment that involves the retooling of factories and the remaking of Ford’s material supply stream as it shifts away from steel sheet for body panels. Ford won’t disclose the investment, but it runs into the billions.
The rest here (behind the paywall).
And one thing Henry didn’t mention in his piece are the trickle-down costs. For example, Bloomberg reports that if you happen to crash your aluminum F150, there aren’t many body-shops that can fix it:
After laboring for five years to develop its aluminum F-150, Ford Motor Co. (F) now confronts a new challenge: preventing higher insurance rates and a dearth of mechanics equipped to repair its body from deterring buyers.
Less than 10 percent of the more than 30,000 independent repair shops in the U.S. are certified and meet training and equipment requirements to work with most aluminum auto-body parts, according to an estimate by Darrell Amberson, chairman of the Automotive Service Association. While some dealerships do in-house body work, independent businesses handle the vast majority of collision repair in the U.S., he said.
This will increase insurance costs too, no?
It’s not just cost. Safety is suffering, too, in a quest to meet EPA standards. The independent Insurance Institute for Highway Safety tested 11 fuel-efficient minicars using the institute’s ”small overlap front crash test,” which is designed to better simulate a real-life car crash. Their conclusion:
Only 1 minicar out of 11 tested achieves an acceptable rating in the Insurance Institute for Highway Safety’s small overlap front crash test, making these tiny vehicles the worst performing group of any evaluated so far.
The Chevrolet Spark’s acceptable rating in the test, along with good ratings in the Institute’s four other crashworthiness evaluations, earns the new minicar a 2014 TOP SAFETY PICK award. The Spark was among the initial award winners announced in December. The new small overlap test results for the rest of the minicar group mean that no other models in this size category join the Spark in the winner’s circle yet.
Introduced in 2012, the small overlap test replicates what happens when the front corner of a vehicle collides with another vehicle or an object such as a tree or utility pole. In the test, 25 percent of a vehicle’s front end on the driver’s side strikes a rigid barrier at 40 mph.
The test is more difficult than the head-on crashes conducted by the government or the longstanding IIHS moderate overlap test because most of the vehicle’s front-end crush zone is bypassed. That makes it hard for the vehicle to manage crash energy, and the occupant compartment can collapse as a result. Nevertheless, in many size categories, manufacturers have found ways to improve vehicle structures to meet this challenge.
“Small, lightweight vehicles have an inherent safety disadvantage. That’s why it’s even more important to choose one with the best occupant protection,” says Joe Nolan, IIHS senior vice president for vehicle research. “Unfortunately, as a group, minicars aren’t performing as well as other vehicle categories in the small overlap crash.”
The worst performers were the Honda Fit on the left and the Fiat 500 on the right. Scary looking:
The best performer and the only one to earn the IIHS’s ”acceptable” designation was the Chevy Spark. (Acceptable is the second highest grade behind “good.”) Video of the crash tests here:
The next obvious test — at lest to me — is to crash an aluminum F150 into a Chevy Spark to see how much it costs to fix both vehicles.
The IIHS does note that the slightly larger cars in the small car category are much safer, with There are “five good ratings and five acceptable ratings among 17 small cars that have been evaluated so far.”