CAFE Standard Won't Stand

The recent announcement by the Obama administration that the CAFE standard for autos and light trucks is being increased to a breathtaking 54.5 mpg has been met with a collective yawn from the motoring public. Why would such a major regulatory change that will drastically alter the types of vehicles that Americans are able to purchase not result in public outcry? Because they do not believe the new standards will actually be implemented.

When government regulates by ideology rather than following the laws of physics and economics, the results are more about political theater than actual change. Increasing the mandated fuel economy of cars and trucks by such a large amount, to be phased in by 2024, ignores the marketplace. The American automobile industry already existing, in the case of General Motors and Chrysler, on the largesse of the federal government through taxpayer-funded bailouts simply cannot expect to be profitable by providing the consumer with smaller vehicles that cost on average $6,000 more due to federal mileage mandates. When consumers are faced with sticker shock brought on by the fuel economy standards, they will stay away from new car dealerships in droves, and federal officials will be forced to either alter the rules with off-ramps large enough to drive an 18-wheel truck on or abandon the new standard altogether.

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The recent action by the Obama administration is just a repeat of the road California regulators have already been down. Zealous regulators in the Golden State have had to repeatedly back off on their attempt to mandate electric cars that automakers could not sell to motorists due to high cost and limited range.  

Just because the federal government mandates something does not mean that it will happen. Federal officials may not understand that, but the American people do.