Obama, Cars, and You by "T"

This is a guest blog by a good friend "T". The editors of DPTOTI hope you enjoy.

At the request of Tom, he expressed desire that I join in his initial quasi-rant on the blog regarding the Obama auto emissions standard that he adopted last month. We proceeded to get into a decent conversation regarding the issue, and I believe I made it fairly clear that the new standard had its pros and cons.

Here's the basics. The government is going to require that automakers selling cars in the United States will be required to have an average mpg of 35.5 by the year 2016. According to the Bureau of Transportation Statistics (yes, a branch of the USDOT), the average new car mpg in 1980 for a passenger car was 24.3. In 2008, that number was 31.2, a 28% increase from 1980. Now, to get to 35.5 by 2016, the US auto industry must increase it by nearly 14% in the next 7 years. The numbers don't lie... time is not on our side.

However, from a business point of view, the car manufacturers embraced the new numbers, maybe to entice a whole new breed of competition over the next 7 years or because majority of the technology is already present and they have heard that the number is fairly feasible. The EPA says that the average cost increase will only be about $600 by 2016, where others say that number may be up in the $1500 area, a significant amount even considering 5 years of fuel savings. Those mpg numbers I show are only representative of the passenger car, where the light truck average for 2008 was only 23.4. Averaging that with the passenger car number gives an mpg of 27.3. That number is downright scary. A few things have to happen/are already happening:

1) A reduction in V8 Engines -- By 2016, it appears that some V6 engines may be more powerful than the V8s are now. If you don't need a V8, why pay the extra money for it unless you need it as a diesel or for commercial purposes.
2) A possible cap and trade market with car emissions -- This would increase the pressure for auto makers to keep that number rising.
3) Dual-clutch transmission expansion -- Would reduce losses between the engine and transmission between gears
4) Turbochargers -- As a proud owner of one... who wouldn't be fond of a change like that?
5) Reduction of powertrain losses -- Any help to increase the efficiency of hybrids

There is already a significant drop in the sales of full-sized SUV's over the past few years, so that certainly helps. And, as of right now, the credits for E85 are only extended through 2015, so that may not be the route to go either. One could also argue that the amount of additional infrastructure to increase ethanol production here in the U.S. is not feasible in comparison to other technologies. Hydrogen fuel cell development from electricity and/or natural gas may cause some infrastructure problems as well. The energy infrastructure problem would be a whole other monster to tackle. I could go on and on about this, but I do believe that if people want their big ass bruiser just to have one... by all means. Just be ready to pay for it at the dealer, and at the pump. We are going the "european route" to an extent, but I don't think we will ever really get there. The technology will be able to reduce the emissions and oil dependence significantly. Now we just need China to get on board...