CAFE Encourages Vehicles to Sip Fuel – What It Means For You

When automakers talk about improving a vehicle, fuel efficiency is always a hot topic. Some government regulations and the environmental community are driving significant reductions in greenhouse gas (GHG) emissions and the automotive industry is at the center of the conversation. So what are the Corporate Average Fuel Economy (CAFE) standards you’re seeing in the news? What do government agencies like the Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) have to do with them? How are current buying trends changing these conversations? And most importantly, how does all of this impact you as a consumer? Let’s take a look.

Much of the recent drive toward vehicle lightweighting has come about because of CAFE as discussed previously in our High-Strength Diet Plan post. Started in the 1970s, these standards were modernized in 2011 for 2012-2025 model year vehicles; mandating automakers achieve a combined average fuel economy of 54.5 mpg for all new vehicles sold by an automaker by the year 2025. These standards are jointly implemented by the EPA, NHTSA and the California Air Resources Board (CARB) with the shared goal of creating a better environment for Americans.

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The ultimate goal of the EPA, NTHSA and CARB’s rules is to reduce energy consumption and GHG emissions through fuel efficiency, which steel-intensive vehicles have been shown to do in every phase of a vehicle’s lifecycle. So as a vehicle’s material makeup changes in light of these new regulations, it’s important to know the best-performing materials will ultimately provide the most value to drivers.

There are a couple key points of the regulations to review:

First, the vehicles counted toward CAFE standards are the ones sold by an automaker, rather than the vehicles produced. If an automaker sells all 50,000 of the pick-up trucks it makes and only 10,000 of the 50,000 electric vehicles it produces for the 2025 model year, they’re likely to miss the mandated CAFE standards.

Secondly, these laws were drafted to ensure regulations wouldn’t be too stringent in the event of a large shift in consumer preference. The regulation called for a mid-term evaluation to assess the market and automakers’ capabilities of meeting the goals for model year 2022 to 2025 vehicles. After a comment period, the EPA will make a final determination to keep or adjust its GHG standards by April 1, 2018. NHTSA will also engage in its own rulemaking to confirm or adjust the miles per gallon (mpg) standards.

So far, according to the 2016 Draft Technical Assessment Report, automakers have been quick to implement new technologies, and in some cases, the cost of implementation has been more affordable than expected. However, the market is much different than when the regulations were agreed upon. Right now, crossovers and SUVs are selling at record-high levels and in response automakers are making more of them. Passenger cars made up about two-thirds of the new vehicle market in 2012, and the CAFE regulations were updated with that market in mind. Now, trucks and SUVs are more than 60% of the market, as affordable gas, more trim options and a desire for more room has shifted buying preferences toward bigger vehicles.

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What does this mean for consumers?

Fuel Efficiency is Here to Stay – For Every Automaker

First and foremost, this means automakers are incentivized to innovate as they squeeze as many mpg out of their vehicles as possible. Not only does this mean more fuel-efficient engines, but modern capabilities like regenerative braking, stop-start technology, electrification and hybridization, and lightweight design will continue to be a presence in the automotive industry through 2025 and beyond. To consumer’s advantage, this also will result in fewer trips to the gas station to fill up.

Materials Are Under Even More Focus

As automakers continue to look for ways to make their vehicles lighter while improving performance, a vehicle’s material makeup will be in greater focus. As buying preferences shift, automakers will keep price in mind at every stage of vehicle development. Knowing the use of multiple steel grades provides higher value to automakers, consumers can expect to see more frequent design decisions like Toyota’s move to use more high-strength steel in the redesigned Camry. This will help keep the price of their vehicle more manageable for consumers while still providing the performance their customers expect.

The steel industry is noted for accelerating innovation in the automotive industry, with advanced high-strength steel emerging as the leader in new vehicle designs. Newer grades of steel are helping to meet government regulators’ and auto buyers’ demands for better mpg and improved vehicle performance while providing the highest value.

What are your thoughts on the EPA’s regulations? What is the most clever or useful fuel-saving feature you’ve seen thus far? Leave us a comment and let us know!

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