We’ve talked a lot about fuel economy legislation in the past, but does it really work on the business side of things? Perhaps more importantly, does fuel economy legislation, such as the CAFE [Corporate Average Fuel Economy] regulations for 2017 and 2025, achieve the intended effect?
At the annual SAE World Congress [Society of Automotive Engineers], these questions help to shape the response of the entire industry of all things automotive, that is, anything that moves people and goods, planes, trains, automobiles, commercial trucks, etc. Sergio Marchionne, CEO of Fiat-Chrysler, asks that legislators consider carefully the consequences of their actions, that they are “rushing precipitously toward embracing (electric vehicles) as the only technological solution.”
Research suggests that just 5% of the market will be made up of electric vehicles, so how does this compare with increasing fuel economy across the board? Unless automakers are free to chart their own course, development of alternative fuels might not happen quickly enough. Marchionne insists that, if fuel economy legislation was more balanced, equally rewarding all forms of alternative fuels, or “technology neutral,” then the best possible results could be achieved in the least amount of time.
As the saying goes, never put all your eggs in one basket, which is exactly what Marchionne thinks the government is doing. Pouring millions of dollars into electric vehicle development and adoption, leaving little for other alternative fuels, could be a bad idea. For example, if breakthrough rechargeable battery technologies don’t work, we could be worse off in the future for lack of exploring the alternatives. Fuel economy legislation makes sense [mostly], but programs favoring just one technology could be counterproductive.