Wednesday, August 6, 2008

Do you believe in the market or in CAFE?

With fanfare and political posturing the Congress jacked up the mandatory fuel economy from 25 mpg to 35 mpg just this year. Despite wailing and gnashing of teeth from the auto industry, it is perfectly possible to build 35 mpg cars today. In fact, you can buy an Aveo, a Yaris, or a Prius today and obtain 35 mpg or better. In a 35 mpg only world, you are limited to tiny econoboxes or pricey hybrids.
Automobile technology has been pretty well worked out since Henry Ford's time, and there is only so much you can do with it. After 100 years, the technological avenues are worked out and well known. The only way to get 35 mpg is build a very small light car (Aveo & Yaris), or install dual propulsion machinery, gasoline engine and battery electric, (Prius) which doubles the cost. Or do like the Europeans, soften the emissions requirements to permit diesel cars. The diesel Rabbit did 40 mpg back in the 1970's.
Of course, if you want a bigger vehicle to bring the kids along, bring sheet goods home from the lumberyard, or furniture back from the auction, you are out of luck.
Market demand causes the car makers to build everything from tiny econoboxes to Hummers, giving citizens the right to buy what they want. 35 mpg CAFE standards pretty much outlaw anything bigger than econoboxes. Me, I'd rather live in a country that allowed citizens to spend their money the way they like.

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