CAFE Rules: Only 1-3 percent of cars need to be electric by 2025

The advent of the electric car is upon us, but despite implications to the contrary, don’t look to Uncle Sam to be as much of a direct driver of this anticipated paradigm shift as some may have previously supposed.

In other quarters, there has been much talk of automakers needing to develop electrified cars to help meet 2017-2025 Corporate Average Fuel Economy (CAFE) rules. These are part of federal regulations that stipulate fleet-wide automaker averages of “54.5 mpg” (about low 40s on the sticker) and greenhouse gas (tailpipe) emissions, but today it was said only a small portion of super-efficient, fleet-average-boosting cars will need to be all-electric.

According to David Strickland, administrator for the National Highway Transportation Safety Administration (NHTSA) speaking at a Consumer Reports-sponsored panel in Yonkers, N.Y., CAFE policies would necessitate electric cars comprise a mere 1 to 3 percent of all vehicles offered for sale in the U.S. 12 years from now.

“Our analysis at NHTSA projects that the automakers can meet these standards largely through advantages in internal combustion engines,” said Strickland alluding to a mixed bag of technological tricks to reduce gas and diesel engine fuel consumption and to clean up emissions. “We project that the automakers will only need to produce about 1 to 3 percent of electric vehicles from plug-ins to meet the 2025 standards.”

Pending BMW i3.

Pending BMW i3.

To people following these issues, including PlugInAmerica’s Legislative Director, Jay Friedland, this percentage sounds quite low and led him to question whether Strickland actually meant what he said. We have it from an off-the-record source in Washington that indeed, Strickland did mean only 1-3 percent of new vehicles available for sale will need to be of the all-electric variety in 2025.

Strickland’s statement also seems to fly in the face of implied and stated assertions made while the now-settled CAFE rules were being promoted in 2011.

Policymakers for NHTSA, the U.S. Environmental Protection Agency (EPA) and others have previously touted the addition of electrified vehicles to respective automakers product offerings. Of course “electrified” also includes hybrids, and an automaker’s average may be pulled up by any combination of vehicles from fuel-efficient conventional cars, to mild hybrids to full hybrids to plug-in hybrids to all-electric.

Tesla Model S.

Tesla Model S.

As is widely known, benefits of purely electric-motor-driven vehicles are that they produce zero emissions – not just reduced emissions – and they burn no fuel – not just less fuel. For these reasons, improving electric vehicle (EV) technology and bringing them mainstream has been seen as a far better end goal than merely incremental efficiency gains by fuel miser petrol burners, including hybrids, no matter how great the gains may be.

In previous reports, the CAFE standards have been viewed as a major driver for the advancement of plug-in cars in addition to other advocacy and lobbying efforts as well as consumer-level preferences, and natural market forces at work.

However, if anyone thought that CAFE was a proverbial coffin nail in the legacy of petroleum-based engines, that would appear to be open to debate.

This is despite the significant scrubbing the nation’s cars and trucks will need to undergo to meet CAFE standards which Strickland otherwise said are reason for “celebration of one of the greatest accomplishments in transportation that we’ve seen” in close to four decades.

By 2025, the average fuel consumption by EPA reckoning for all passenger vehicles for sale in the U.S. must be 54.5 mpg (the low 40 mpg range on the window sticker is because of calculations by a different formula).

Compared to new vehicles sold in 2011, the federal government estimates by 2025 consumers will have saved $1.7 trillion in gasoline expenditures and greenhouse gas emissions will be reduced by nearly 2 billion metric tons.

Strickland said presently U.S. vehicles account for 60 percent of all petroleum consumption, thus it was deemed more than justifiable to look to greater austerity in mandates meant to trim back consumption.

The CAFE rules were actually a collaborative effort and a compromise from an initial 62 mpg average proposed for vehicles sold in the U.S. by 2025.

2014 Chevy Spark EV.

2014 Chevy Spark EV.

Automakers and other industry stakeholders have generally agreed to the need, but numerous concerns have been raised to the effect that mandating an extremely high bar would have negative unintended consequences. Included are fears of a resultant chilling effect on the market as automakers passed on extra costs to consumers.

This may in part be why the emphasis by Strickland on new vehicles available and to come was overwhelmingly consumer-positive. His statements to this effect were actually first made by Consumer Reports President and CEO Jim Guest who said consumers will have reason to rejoice in that fuel economy is no longer fraught with compromises including acceptance of small, less safe vehicles lacking luxury and amenities.

Advances in technology have seen – and will see – more and more choices with all the “wow” factor anyone would want that nonetheless are more efficient than previous generation vehicles, Guest said.

Electric Car Future Discussed

Cuing in on the tone set by keynote speaker Strickland, and subsequent speaker EPA Region 2 Administrator Judith Enck, members of Consumer Reports’ panel of industry experts broached the topic of electric vehicle viability.

Opening the discussion was Stephen Crolius, Vice President, Alliance Consulting Group, who spoke poignantly in favor of the notion that electric vehicles are indeed ready for prime time.

“This isn’t castor oil here,” said Crolius referring to unsavory medicine that must be swallowed as a metaphor for the prospect of accepting electric cars.

Mitsubishi i-MiEV.

Mitsubishi i-MiEV.

Instead, he added, the electric car could well be viewed as “the lowest hanging fruit” to meeting and exceeding CAFE goals of reducing petroleum consumption and cutting pollution.

“I think we can all agree the electric car is not something that will not come into its own by 2025,” said Crolius.

Indeed, he said, the time for electric cars and trucks “is now,” despite the fact that CAFE can be met largely without them.

Following Crolius’ opening remarks, a familiar topic of the merits of electric cars like Nissan’s Leaf ensued over the usual talking points: issues of range anxiety, consumer needs versus wants; what it will take to make them mainstream, and so forth.

Consumer Reports’ director of testing, Jake Fisher – who’s also a part-time auto racer who did the drift scenes with a Tesla Model S in a recent video – went on to discuss the Model S as a great car with negligible range anxiety, comparing favorably to a Porsche Panamera, but priced out of reach for many who’d like the Tesla’s gas-car-beating attributes in an electric car they could afford.

Source: HybridCars.com May 2013 Dashboard.

Source: HybridCars.com May 2013 Dashboard.

Today’s market of all-electric cars can nearly be counted on one hand: You have the Leaf, Mistusbishi i-MiEV and Tesla Model S range as the only EVs sold in all 50 states. Then there are limited-market models – some have called them “compliance cars” – like the Ford Focus Electric, Smart forTwo EV, Honda Fit EV, and pending Chevy Spark EV. Anticipated are more electric cars, including BMW’s i3.

To be sure, the market is just beginning, and even if CAFE mandates could theoretically be met with only 1-3 percent of the nation’s cars being zero-emission EVs, automakers do have the option to more drastically cut fleet fuel consumption and emissions by continuing to develop more.

California Air Resources Board More Influential

PluginAmerica’s Jay Friedland – who said EVs and other eco cars sell better when fuel prices rise, and expressed doubt whether Strickland’s model had accounted for rising fuel prices – also mentioned rules in place that are “not going away” by the California Air Resources Board.

These state-level mandates essentially overlap what ever the federal rules stipulate about tailpipe emissions, and in short, call for one in seven vehicles sold in California to be zero emission vehicles (ZEV) by 2025.

This is 15 percent, and automakers wishing to do business in California will need to make the grade. What’s more, according to CARB’s Air Pollution Specialist Anna Wong, 10 states thus far have signed onto California’s ZEV “Clean Car Rules” making them the most potent de facto driver of EVs from a policy standpoint in the United States.

Wong said Strickland’s statement of 1-3 percent EVs needed to meet CAFE was theoretically correct in that existing internal combustion engine technologies and those expected to come online could mean a given automaker could get by with only so few EVs.

Consumer Reports did not take it too easy on its purchased Model S.

Consumer Reports did not take it too easy on its purchased Model S.

But California’s Section 177 law stands, and EVs are here now, with more expected, as CARB Public Information Officer Melanie Turner also offered.

“Our ZEV regulation is designed to help meet California’s specific and unique air quality and climate challenges,” she said of rules in a state that’s actually been looking as far forward as Europe has, to 2050.

Thus CARB – not CAFE – would appear to be the strongest law in the land to give automakers that extra nudge to keep researching, developing, and eventually bringing forth more all-electric passenger vehicles.