EPA Regulations and the Future of the American Auto Industry

According to a recent Wall St. Journal Report, the US Environmental Protection Agency is considering new ways of measuring vehicle fuel efficiency and environmental impact.  The new labeling system would assign vehicles a letter grade based on MPG and grams of CO2 per miles driven.  From August 31sts WSJ:

While the current labels are fairly packed with information about fuel consumption, costs and environmental impact, they were designed for traditional gasoline-powered vehicles. Now that battery-powered electric cars and plug-in hybrids are getting ready to come to market, consumers are seeking additional information tailored to make it easier to compare vehicles across a variety of power systems.

One proposed sticker looks a lot like the current ones, but with more emphasis on average fuel economy and annual fuel cost. Another gives vehicles prominently displayed letter grades from A through D based on their environmental footprints. The new sticker designs are only proposals, and the agencies are asking for public feedback to help them decide on a final design.

“We are asking the American people to tell us what they need to make the best economic and environmental decisions when buying a new car,” said EPA Administrator Lisa P. Jackson. “New fuel economy labels will keep pace with the new generation of fuel efficient cars and trucks rolling off the line, and provide simple, straightforward updates to inform consumers about their choices in a rapidly changing market.”

This change could disproportionately effect affect US auto companies, do to their reliance on truck and SUV sales and the perception of worse fuel economy from US brands.  However, it should be pointed out that GM is launching the Chevy Volt soon and Ford sells a number of hybrids, including the excellent Ford Fusion Hybrid. 


This also relates to globalization.  US brands are beginning to import cars they typically sold in Europe and Asia.  The Ford Transit Connect, for example, is a small van that appeals to small businesses who want van-like mobility without van-like fuel economy.  GM is bringing the Chevy Spark here, a so-called "micro car."  Chrysler, now owned by Italy's Fiat, will begin importing one of Fiats tiny cars as well. 

Josh Kaib