Part 2 of 2. Remarks of DaimlerChrysler CEO Thomas W. LaSorda follows:
“I’ve focused on what we are doing, from a technology perspective, to reduce petroleum consumption–and, since they are directly related, greenhouse gases. But I need to mention one more item in this vein. For those who advocate 4 percent annual CAFE increases over the next 10 years–which translates to a 50 percent fuel economy increase–we know how to do that , too.
In fact, we already do it…in Europe. The U.S. combined fleet averages 24-25 mpg, and in Europe the fleet averages 36 mpg. That’s a 50 percent difference.
Why is there a huge disparity between our fleets there and here? After all, we are the same companies in Europe that we are in the U.S., with access to similar technologies. The difference is the European approach to energy and greenhouse gas policies. They’ve made some tough political choices. They’ve highly taxed gasoline, making the price three times higher than in the U.S., and they have incentives on diesel fuel. As a result of these policies, fuel economy is always high on customer’s list, and not just when there’s a spike in fuel prices.
Through policies which affect consumer demand, the mix of vehicles sold in Europe is radically different than here–about 60 percent compacts or smaller, compared to about 15 percent here; and about 50 percent of passenger vehicles are diesel powered.
There’s no magic at work here. A gas-engine mid-size car in Europe gets the same mileage as a gas-engine mid-size car in the U.S. It’s just that customers demand a very different mix of vehicles in Europe.
The European model, while far from perfect, is based on policies that leverage demand and market forces, not just on policies that fight them.
However, in the U.S., our policies have historically addressed the supply side–light-duty vehicle fuel-economy standards. But consider how a 50 percent fuel-economy improvement relates to new vehicle technology alone. If all the new vehicles sold in the U.S. 10 years from now were hybrids or diesels–something that no one really believes is feasible–fuel economy would improve by only 25-30 percent.
U,.S. policymakers must adopt a new and unique formula that fits here. DaimlerChrysler supports a three-pronged, comprehensive approach to climate change and energy security; one that includes a combination of:
vehicle efficiency improvements;
the expanded use of alternative fuels–such as ethanol and biodiesel;
and, the harnessing of market forces to help drive consumer demand.
we all need to be very clear on one point–new vehicle efficiency improvements alone will never result in the overall decline in petroleum consumption and greenhouse gas emissions we need. The demand for fuel will continue to grow, as more drivers enter the market and vehicles are driven longer distances.
There are more than 230 million light-duty vehicles currently in use today in the U.S. which travel nearly 3 trillion miles. That is nearly 13,000 miles traveled by each vehicle, each year–an increase of about 30 percent since 1985. Thus, greenhouse gases and the demand for petroleum will not be offset by only addressing efficiency improvements among the 16-17 million new vehicles that enter the U.S. market each year. In order to decrease total greenhouse gas emissions and petroleum consumption, we need to accelerate the adoption of alternative fuels such as E85 and bio-diesel, which will affect a greater proportion of the population of light-duty vehicles.
And by the way, while travel is growing in the U.S., it will grow exponentially as China and India increase the global automotive market dramatically. The combined Indian and Chinese existing fleet will almost triple during the next 10 years to about 90 million vehicles, while the U.S. fleet is forecast to grow 25 percent.
To address this increase in demand, we need a comprehensive approach that addresses energy use and greenhouse gas emissions from all sectors of the U.S. economy, and encourages the most efficient reductions in energy use. Our approach should not just address the the supply of energy-efficient products, but also spur demand for them, while establishing reasonable time-tables for compliance and realistic levels of reductions.
Although it should go without saying, I’ll say it anyway: This effort needs to be national in scope. We need to avoid an unacceptable and inefficient patchwork on inconsistent Federal, State, and local approaches. In fact, to truly be effective in curbing greenhouse gases, we need a global solution.
On the vehicle efficiency side, we at Daimler/Chrysler recognize the need for action. And we’re taking it. Every day, our engineers are working to reduce greenhouse gases and petroleum consumption. We absolutely will be part of the solution and will accelerate our efforts. We also support reforming the CAFE program to base it on vehicle attributes and pledge to continue to work with NHTSA to establish maximum feasible levels of fuel economy–levels that are based on sound science and that recognize the limits of technology, cost, and consumer demand.
But again, if we intend to make meaningful progress in reducing petroleum consumption in this country, in addition to vehicle technology improvements, we look to the Federal Government to establish policies that address consumer demand and bend the bias of transportation fuels toward lower carbon alternatives.
Thank you and I look forward to answering your questions.”
Larry’s comments: I am pleased to see that at least one committee inside the beltway is working. My sense is that all of the major auto manufacturers were “invited to have a cup of coffee” and discuss global warming as well as taking action to reduce our dependence on imported oil.
What’s your take on the above two part commentary by the CEO of DaimlerChrysler?
Did you notice his candor on setting goals and objectives that are feasible based on our ever increasing number of cars on the road and our preference to continue driving gas guzzlers when compared to cars found in Europe. When we were in Europe last summer we saw several Smart cars in Italy. Although I would love to get one for my wife I believe they cannot be sold in CA as of now due to emission levels.
Good news for Juice readers.
Unlike Arnold, the Gibert’s do not drive a Hummer
Excellent information, thanks for posting it.
I know that many people don’t believe that we should tax people to get them to change their behavior, but apparently they are doing it in Europe and it is working.
In the U.S., it’s hard to do politically because so many commute so far to work, and no one wants to take that on.
One answer for us, but on a long term scale is to build more mixed use developments, and create communities where people can live, shop and work without driving long distances, I believe that is part of the answer in Europe too.
I know that a couple of years back, I asked myself what could I do to make my life better and the number one thing on the list was to live close to work, so I moved and it was a godsend, I went from 10,000 miles a year on my car to about 2500, because I walk to work.
This email response from VA comes from a former employee of the EPA whom we interviewed about GM foods and ethanol on the Cutting Edge
Hi Larry,
Yes, this was a good one. American politicians have sold their souls to corporations. They allowed car companies to destroy the public transport system of this country in the 1930s so that GM could sell its trucks and cars. Imagine the magnitude of that crime? We need people who will put a train in the middle of each highway; reestablish trams in city streets; make the use of public transport almost free; tax car drivers and double or triple the price of gas, using all the income to subsidize efficient, pollution-free trains and trams and buses. An of course, order car companies to come up with pollution-free automobiles or go out of business. Now that would be a public transport policy.
All the best,
Evaggelos.
The Oil and auto companies have stifled competition in the transportation arena. But,
“tax car drivers and double or triple the price of gas, using all the
income to subsidize efficient, pollution-free trains and trams and buses”
The problem with taxing cars to fund free/almost free government run trains, busses and trams, is that is another way of stifling competition.