Automakers Ready To Renege On CAFE Agreement To Focus On Guzzlers

Here’s how I believe this will play out:

(1) The United States has a huge oil industry. It’s experiencing the oil glut, just as world markets are. It wants to generate more profit, and they do that by selling more product. It’s in the US oil industry’s (self) interest to sell more product. Gasoline is one of their major products.

(2) US residents enjoy the benefits of a subsidized oil industry. It’s one of the reasons the US enjoys rivers of CHEAP oil, while most of rest of the world pays several times the pump price we do. Check the price of gasoline in the UK, Iceland, Norway, Germany, Japan, etc. It’s scary expensive. And yes, the EV industry is subsidized in the US as well, but let’s put it into perspective: About 2% of the cars on US roads are EVs, while about 98% have internal combustion engines (ICE). Pay attention to the 98%. Don’t let someone else’s (Big Oil’s) agenda divert your attention away from this!

(3) The United States also as a huge auto industry. It depends on oil (gasoline). This interdependency is not a coincidence!

(4) The US auto industry is looking for an “easy out,” an easy way to make more profit. They believe that by being lazy and not working aggressively towards making more fuel-efficient vehicles (i.e., by scrapping proposed CAFE targets), they’ll be able to sell more gas-guzzling vehicles, with lower research and development costs (i.e., more profit). They’re right… but only in the SHORT term.

(5) As the US shifts their focus away from gasoline fuel efficiency, oil consumption goes up, and the US oil industry is happy. More oil sales equals more profit. However, most of the rest of the world – that being the part that doesn’t enjoy rivers of cheap oil, like we do – is will working hard to reduce their dependency on oil by increasing fuel efficiency in ICE, and shifting from ICE to EVs.

(6) Over time, US-made gas-guzzlers will become ever less appealing to foreign (global) markets. US auto sales will decline globally, both abroad and domestically. Remember that in the continental US, not all people value gas-guzzlers. There are still lots of consumers who value fuel efficiency, and even some who want to reduce air pollution by burning less fossil fuels (contrary to the desires of the US’s oil industry and coal industry).

(7) The US government’s “easy out” (AKA quick fix) will be to impose tariffs on the more desirable, fuel-efficient foreign vehicles. Domestically, those people who can afford the foreign brands will continue to buy them (begrudgingly) at a (highly taxed) price. Those who can’t afford that option will be forced to buy what American manufacturers offer: Gas guzzlers, which are cheaper to buy but more expensive to operate.


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(8) This will create a bigger problem for American automakers: Their market will essentially become “those who can’t afford cleaner, more efficient foreign brands.” In other words, US automakers will have painted themselves into a corner in which they’re trying to get money from people who don’t have much money. This will be yet another step in the decline of the American Auto Empire.

(9) Meanwhile, other countries are currently engaged in reducing their dependency on oil. Most of them don’t have a vested interest in oil because they buy it from other nations, the oil-producing ones. These countries, being most of the world, are currently working aggressively on alternative technologies such as renewables, electric power, etc. The only automobile manufacturer in America that’s thumbing its nose at Big Oil is Tesla, and who knows how long they’ll be around.

(10) Eventually, when the dust settles, the US will have a crippled auto industry that’s decades behind the rest of the world. Comparatively speaking, our cars will look like Cuban clunkers to the rest of the world, as we’ll be clinging to “old world” gas-guzzlers as the rest of the world made the shift to alternative (non-oil) fuels. Expect more US auto industry bailouts, a frantic game of catch-up (as we saw during the Energy Crisis of the 1970s), and lots of hurt to go around in America.

And all this because Big Oil wants to keep making huge profits, regardless of the impact to others, and US automakers want an “easy out”, with myopic foresight, rather than getting on the train and changing with the rest of the world.

Save this post for your records, folk. I pray that I am wrong… for Americans’ sake. Looking no further ahead than next quarter’s profits has hurt us in the past. It’s hurting us now, and will continue to hurt us in the future. This pattern will continue for as long as we value the well-being of the US Oil industry and the US Auto industry more than we value the well-being of The People of America.

While I agree with many things above in TheSteve's post - Steve is forgetting California - which has its OWN Environmental Laws and enforcement agency. THEY are not interested in the Gas mileage as much as they are interested in emissions - but the two go hand in hand. California is not going to reduce its emissions requirements with Jerry Brown in charge or any other Governor because of their Smog Problems. At the same time - are you noted - Europe will not be backing down from its emission,mileage standards - and quest (like California) for more EV use (Several Cities and/or countries in Europe are planning to outlaw ICE cars - and required EV's in the city). In China and India - the air is so bad in some places that they have to close down factories during heat waves. SO - we can expect China and India to require low emissions as well.

Now - look at the current state of the American ICE Producers. With the exception of GM without Opel - they all have significant presence in Europe and/or China- wth GM selling more cars in China than the US. Ford currently produces on the ONE CAR concept were models meet emissions standards worldwide - so I doubt they would change. FCA is a European car company to begin with - and GM has a major presence in China.

THere is really no American car presence in Europe - Ford sells the cars it makes for that market here - but very few AMerican made cars there. May as well leave out GM from Europe - with the exception of a few Corvettes and Cadillacs - GM sells almost no cars there. Only FCA - which actually sells some Jeeps around the world - sells some American made cars there. WE don't have a huge domestic car industry - compared to the past when GM, Ford and Chrysler sold 90% of the cars here. People outside of North AMerica do not buy cars made for the USA because they are already too big and gas guzzling - and expensive as well.

I say buy whatever you want to drive and do not complain about the MPG.

It's only the triggered Alt-Left that thinks CAFE is a brilliant idea.

Sorry Matt - your idea fails to cover the possibility that even YOU (If you are actually a human) may have to Breathe the air. This is something even the Alt-right actually sometimes do - when they don't have their oxygen tanks with them! Since reducing emissions and higher gas mileage go hand in hand - CAFE was a needed idea to reduce vehicle emissions. That it helps our country become energy independent is a plus.AND the reduction of oil usage - combined with new production CAN do that if we need it to. It is inherently Un-AMerican to only think of yourself - and forget the needs of others in the country.

TomM you're such an indoctrinated Liberal that you wouldn't know reality if it bit you on the ass.

You're an apologist and therefore unpatriotic.

Ahh, now it's clear why Matt is so unlikable, he's a Republican! Totally makes sense now.

Forgot to add that with the advent of batter technology, ICE will have nowhere to go but extinction (eventually), or at least reduced to a niche market like pocket watches. Imagine if technology progresses to a point where you actually get more miles out of a 5 minute charge (say 1000 miles), would anyone still buy ICE cars? I think within 5-10 years, that may be very possible.

Can't wait to breathe fresh air in California!!