President Obama has introduced a new schedule for auto-industry mileage standards, the so-called CAFE system (I mentioned this previously here). The CAFE standard is the sales-weighted harmonic mean of a auto-company’s fleet of cars. Currently the CAFE standard for cars is 28.5 mpg and for light trucks and SUVs it’s 22.3 mpg. Under Obama’s plan, by 2016 the standard for cars would reach 39 mpg – it was previously scheduled to reach 31 mpg – and for pickups and SUVs it’s scheduled to reach 30 mpg instead of just 24 mpg under the old plan. All in all, this is a good – and long overdue -move on America’s oil dependence and climate change.
I still think it’s a mistake to treat SUVs differently than cars, especially since they are nearly the same thing at the more larger end of the car range and the smaller end of the SUV range. We know that SUVs are used primarily as passenger vehicles, and we shouldn’t continue to pretend they are somehow different. So-called “crossover SUVs” are essentially just large cars moved into the SUV category precisely to avoid CAFE standards and as SUVs are forced to move into the 30+ mpg range to meet with CAFE standards, they are going to look even more like large cars do today. I’ve been in the market for a larger car for some time now, and while a Subaru Outback or a Mazda 5 fit into the car category today, at 39 mpg they may not, and the 2016 version of Andrew Smith may end up buying an SUV because SUVs might be the only larger cars available at that size. If today’s large car purchases (at 28 mpg average) are tomorrow’s SUV purchases (at 30 mpg average), the effect of the new standards could be less than it appears at first glance.
Having said that, it’s still a huge step forward. With even automakers excited by the prospect, I think it shows that Barack Obama is startlingly good at bringing divergent views together on difficult issues. How about the tackling the gas tax next, Mr President?