Well, it wouldn’t be the first time that Corporate Average Fuel Economy [CAFE] regulations were the deciding factor in developing fuel efficient vehicles. Think back to 1996, the General Motors [GM] EV1, an electric vehicle, which replaced the GM Ultralight.
The EV1 was CAFE fodder for certain, built only to make the grade, but ultimately scrapped, in 2003, just as the Ultralight was. By producing the EV1 and leasing a zero-emissions vehicle, GM was able to continue selling vehicles in California, one of the biggest single automotive markets.
The latest CAFE regulations stipulate that, in order to reduce carbon-dioxide [CO2] emissions, the average fuel economy should be about 54.5 mpg by 2025. There are other ways to reduce CO2 emissions without increasing fuel economy, such as fuel cells, which use fuel but have no emissions, but still, reducing fuel consumption is the single easiest method, aside from eliminating fuel in an electric vehicle. The EPA estimates that by 2021, actual fuel economy will be about 40 mpg in 2021, and up to 49 mpg by 2025.
While engine technology has made leaps and bounds over previous generations, the market still isn’t catching on to the need for better fuel economy, and so manufacturers have been able to take fuel economy so far. Nissan Division General Manager Al Castignetti responded, “No carmaker makes 54.5 miles per gallon without alternative-fuel vehicles.”
Practically the only way to meet the increasingly strict standards will be to offer electrified vehicles. The new Fiat 500e electric vehicle might be painted as CAFE fodder by most, but “the way the CAFE and regulatory environment is, in order to be compliant, most if not all OEMs will need some form of electrification in their product portfolio,” say Chrysler US Sales Chief Reid Bigland.