Walberg, of Tipton, is leading the GOP effort to repeal the Biden administration's latest increase in Corporate Average Fuel Economy (CAFE) standards. The new rules were finalized in June and are intended to incentivize electric vehicle production. They require each automaker's new vehicle fleet to achieve an average of 50.4 miles per gallon by 2031.
These standards are unrealistic, yet automakers will face huge fines for failing to meet them. The current average is 26.9 mpg, up 19.3 mpg from 20 years ago. The domestic automobile companies consistently fall short of the mandate, and now they must nearly double efficiency in seven years.
This is the wrong time to put such a heavy burden on manufacturers. The EV market is in turmoil and its future is uncertain. Consumer demand for electric vehicles is lagging the sales goals, and the automakers are pulling back investment in their production.
Automakers need a moment to determine whether the all-electric fleet they have been pursuing at the government's insistence is what makes sense for the future market. They face challenges in bringing driving range to a level motorists will be comfortable with, building out a charging network and addressing the rapid depreciation of EV batteries, and as a result, their resale value.
There are also uncertainties about the supply lines for materials needed to build EV batteries. Achieving profitability on EV sales is a long way off. Ford claims to have lost about $130,000 for every electric vehicle it sold during the first quarter of this year.
This would be a good time to pause and consider whether a mixture of technologies that includes EVs, hybrids and high-efficiency internal combustion engines might be a more practical approach to reducing greenhouse gases attributed to the transportation sector.
Walberg's proposal is a start. The new CAFE rules would require annual average improvements in fuel efficiency of more than four miles per gallon. From 2022 to 2023, the gain was 0.6 miles per gallon, and that was considered excellent progress.
The domestic three automakers estimate fines under the stricter CAFE standards will total $10.5 billion. That's money that would be better spent on research to develop practical clean vehicles. The anticipated outlays in government penalty payments will also make U.S. companies less competitive with Chinese automakers who produce twice as many EVs as U.S. manufacturers and exported five million of them in 2023, the most of any country.
Meanwhile, the share of worldwide cars sold that are American made is near an all time low. Pressuring domestic manufacturers to accelerate EV production in such a disruptive market is poor policy.
Walberg's proposal will give automakers what they need most from the federal government — time to figure this all out.
© 2024 The Detroit News. Distributed by Tribune Content Agency, LLC.
