[Cowherd.J]

The Trump administration has released new fuel efficiency standards for cars and trucks making them less strict than they were previously.

"The final rule is a dialed-down version of the one the administration originally planned. Instead of proposing zero improvements in fuel efficiency in coming years, it would require automakers to increase fuel economy across their fleets by 1.5% a year, with a goal of achieving an average of about 40 miles per gallon by 2026. That’s still a major departure from current rules, which mandate annual increases of 5%, reaching an average of 54 mpg by 2025."

For me this seems like an unnecessary change that was made, the oil and gas industry doesn't need more help from the government. What does everyone else think about this? Maybe I'm missing something.

Trump weakens fuel economy standards, rolling back key U.S. effort against climate change

The Trump administration released weaker fuel economy standards for new cars and trucks, pitting the federal government against California.

www.latimes.com

 

[dbsb3233]

the oil and gas industry doesn't need more help from the government.

I don't want to get into a whole political thing, but I will respond about a structural point. It's not government "help" to the oil/gas industry, it's just less harm.

I suppose that's just semantics, but it's also an important distinction. CAFE mandates act as a restriction to the variety of vehicles manufacturers are allowed to sell, and thereby restrict consumer choice. They interfere with what consumers would otherwise normally buy. And the stricter those mandates, the bigger the interference. The ones they interfere with (harm) are ICE automakers and the gasoline/diesel supply chain. And as a result, they help EV makers and the electricity supply chain.

CAFE mandates aren't help to oil/gas, they're harm. Laxing them up just causes them less harm.

 

[zhackwyatt]

I don't want to get into a whole political thing, but I will respond about a structural point. It's not government "help" to the oil/gas industry, it's just less harm.

I suppose that's just semantics, but it's also an important distinction. CAFE mandates act as a restriction to the variety of vehicles manufacturers are allowed to sell, and thereby restrict consumer choice. They interfere with what consumers would otherwise normally buy. And the stricter those mandates, the bigger the interference. The ones they interfere with (harm) are ICE automakers and the gasoline/diesel supply chain. And as a result, they help EV makers and the electricity supply chain.

CAFE mandates aren't help to oil/gas, they're harm. Laxing them up just causes them less harm.

That's a very good way of putting it.

Oil & gas industry is thousands of jobs. My father made a living being out in the oil field and we weren't rich by any means. The price per barrel of oil directly impacted his paycheck. I'm not defending the industry or anything, I just wanted to make that point before folks start demonizing.

 

[dbsb3233]

I'm not necessarily against some reasonable government regulations to help reduce pollution. And there's no doubt that ICE produces more pollution than BEV. But I've never been a fan of CAFE mandates (I don't call them "standards" because that downplays the forced nature of them). What they really do is restrict consumer choice. If, for instance, GM customers happen to be choosing more Tahoes and Suburbans and fewer Bolts and Sonics (to the point that they exceed the CAFE MPG mandate), then GM is forced to offer fewer Tahoes and Suburbans for sale. That means consumers aren't able to buy what they want (and the price for the artificially limited supply rises). I just prefer more competition and more choice for consumers. Build a better product, and it will sell all on it's own.

That's what I think is going to happen with BEVs, now that batteries have reached a tipping point on range and price. We're going to start seeing great news BEVs like the Mach-e, which for many usages (not all) is better than it's ICE counterpart. That's why it should sell quite well. And do even better as those battery prices continue to come down so they can sell a Mach-e for $40k instead of $50k.

 

[MachDrive]

The whole CAFE thing was a joke, with big loop-holes that were never fixed. all manufacturers had to do was offer ‘compliance’ cars that offset the balance of the less efficient vehicles sold. Offering undesirable base builds of many vehicles to meet regulation using underpowered engines and stripped down features to reduce weight.

What drives these companies more is the fact that the rest of the world is trending to EVs, and Tesla selling nearly 350k EV sedans in a year (when sedans are a shrinking market).
Legacy companies realize they can’t ignore the EV market anymore. Compared to losing ground in the global market, CAFE is just a nuisance.

 

[dbsb3233]

CAFE is definitely a nuisance. But the reason that Ford and GM will start building more BEVs for sale in US markets is not because some other countries are trending that way, it's because batteries are finally good enough and cheap enough to be able to build a decent, competitive product that US consumers will buy.

Without current battery technology, the Mach-e wouldn't exist. Very few Americans would have bought a $70,000 170 mile Mach-e 5 years ago (which is about the best they could have done then). But now Ford can build a $50,000 300 mile Mach-e. And more Americans will buy that. Which is why Ford is building them now.

 

[MachDrive]

Yes, more competitive to All markets. Remember, a majority of MMe’s produced will go overseas to meet other countries regulations.

My point being that US regulations and mandates have much less to do with Legacy carmakers EV plans than did the Europe/China EV trend (75% of all EV sales) and Tesla sales (majority of all EVs sold in 2019).

Making an EV Americans will actually buy may help EV sales here. but with the constraint of 50k batteries year 1, and a reluctance giving production estimates for year 2 (saying “well, lets see how it goes”), it still feels like their treating the MMe as a compliance car. Ford appears in no hurry to leave the ICE world behind.

 

[dbsb3233]

Of course they're not in a hurry to leave the ICE world behind. Nor should they be, because it would make no economic sense for them. It's their main business, and their cash cow.

I agree that regulations and mandates don't have a lot to do with them making the Mach-e. That's just what I said too. It's the advancement of batteries that allow them to make a BEV now that more US consumers will buy, that wasn't possible for them 5 years ago.

But as you say, the batteries are still a bit of a problem from a supply standpoint, thus forcing them to limit how many Mach-e's they can make for 2021. But even though they (and I) think that it will sell pretty well, it'll still be a gradual shift for mainstream US consumers to get used to BEVs. So yes, they really can't say exactly how much demand there will be yet, and how ready mainstream US consumers will be. It's prudent to see how sales of the 2021's go before committing to the # of 2022's yet.

 

[pbojanoski]

Of course they're not in a hurry to leave the ICE world behind. Nor should they be, because it would make no economic sense for them. It's their main business, and their cash cow.

I agree that regulations and mandates don't have a lot to do with them making the Mach-e. That's just what I said too. It's the advancement of batteries that allow them to make a BEV now that more US consumers will buy, that wasn't possible for them 5 years ago.

But as you say, the batteries are still a bit of a problem from a supply standpoint, thus forcing them to limit how many Mach-e's they can make for 2021. But even though they (and I) think that it will sell pretty well, it'll still be a gradual shift for mainstream US consumers to get used to BEVs. So yes, they really can't say exactly how much demand there will be yet, and how ready mainstream US consumers will be. It's prudent to see how sales of the 2021's go before committing to the # of 2022's yet.

I'm not looking to play the role of the cheerleader, but @dbsb3233 you have some great posts above that I couldn't have said better about CAFE and why Ford can finally get into the BEV market with a real desirable vehicle. Thanks for sharing!