Riding on the coattails of the US Government, Canada is joining in on the push to get automobile manufacturers to produce more fuel efficient vehicles. The proposal being brought forward will see all new trucks and cars essentially double their fuel efficiency over the current level by 2025. This new standard would put Canada and USA's fuel efficiencies on par with vehicles produced in Europe, China & Japan.
There is no question that a newer, more efficient vehicle would bring benefits: to the owner in terms of reduced operating costs for fuel; to the environment in reduced greenhouse gas emissions; and to the economy with less reliance on the global oil market, which in turn would translate into reduced volatility of gas prices at the pump.
With all those great reasons noted above, why would the automobile industry put up a fight to see this change brought into rule? Well for them, changing the fuel efficiency of a vehicle goes beyond simple electronics, and requires changes to allow for greater reliance on biofuels, electrification, coupled with body style and size. That alone would cost billions of dollars in upgrading/updating their production facilities - a cost they are unable to bear in these current economic conditions.
That increased cost to produce will most likely translate into higher purchase costs for the consumer. And from a point-of-purchase view, the consumer is less inclined to spend more when the economy is in turmoil.
Another consumer-driven concern being raised by the manufacturers is the current purchasing habits of their customers. Sales of SUVs, vans, and other high-fuel consumption vehicles continue to occur, whereas sales of fuel-efficient smaller style vehicles account for less than 3% of the current domestic market. Absent of consumer demand, manufacturers are less-than-receptive to government intervention.
The proposed new standards are expected to be released in September, and then brought into force following public meetings early next year. Indications seem to indicate that the US Government's opening bid may be lowered. As well, the manufacturers are lobbying to ensure the State of California doesn't set a standard of its own.
So now comes the question: Would you buy a smaller pick-up or SUV for more money than that larger style? Would you pay more for a vehicle knowing that you're reducing your 'carbon footprint'? If they build it, would you buy it?
Originally published on Dan's website.
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