Commentary

When President Barack Obama unveiled his new corporate average fuel economy legislation flanked by 10 top auto industry executives, some characterized it as an historic meeting of minds.

Others thought it looked more like prisoners of war being paraded before the press by their captors.

You could argue the latter might be true of the CEOs of General Motors and Chrysler, who now are beholden to the U.S. government. But top executives from Ford, Toyota, Honda and Daimler were there, too. Their smiles seemed genuine.

Getting Honda and Toyota to go along was more difficult than one might think. Despite their fuel-efficiency advantage over the Detroit Three, both auto makers were part of the lawsuit trying to prevent California from implementing its own home-grown fuel-economy standard, which the state disingenuously called a carbon-dioxide emissions standard.

The Obama Admin. walked a tightrope by acknowledging it may be constitutionally legal for California and other states to regulate tailpipe emissions under the Clean Air Act, but it would be destructive to allow.

No auto maker can cost-effectively design and engineer vehicles to meet a patchwork of emissions standards for individual states.

A clear set of nationwide rules is all auto makers who sell vehicles in the U.S. really want. Other major industrialized countries guarantee consumer demand for more efficient vehicles by making fuel expensive with high taxes.

That won’t work politically in the U.S., so clear nationwide fuel economy rules are the next best choice.

What’s more, the new mandate may not be as onerous to auto makers as it looks.

That’s because two government bodies, the National Highway Traffic Safety Admin. and the Environmental Protection Agency have different formulas for calculating fuel-economy figures. NHTSA calculates CAFE numbers differently than the EPA does for new-vehicle window stickers.

According to most analysts, fuel economy numbers calculated for CAFE typically are almost 30% higher than window-sticker EPA figures. So the president's new 39 mpg (6 L/100 km) city/highway rating for cars actually translates to about 29 mpg (8 L/100 km). The new 30 mpg (7.8 L/100 km) for light trucks is more like a combined EPA figure of 23 mpg (10 L/100 km).

Those figures will be tough to meet, but not impossible. Powertrain technologies such as direct injection, turbocharging and dual-clutch transmissions combined with lightweight materials should make it possible, if implementation steers clear of political red tape.

The only wild card is the consumer.

President Obama claims the stricter regulations will add $1,300 to consumers’ cost for a typical car or truck by 2016, and that those costs mostly will be offset by savings at the fuel pump over several years.

Knowledgeable, politically independent sources say that is overly optimistic. Engineering firm Ricardo says the technology required to meet the new standards will add $5,000 to $12,000 to the vehicle price, depending on size and use.

Will U.S. consumers, who are guided more by their pocketbooks than their eco consciousness, pay that much extra for fuel efficiency? That’s the big maybe.

With any luck, an improving global economy will do what Washington cannot: raise fuel prices high enough to make efficiency worth the premium.

dwinter@wardsauto.com