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Best Business Commentary
December 18, 2007
The costs of fuel efficiency
The fuel-efficiency rules in the new energy bill are “a step in the right direction to reduce America’s addiction to fossil fuels,” says David Kiley in BusinessWeek.com. But you might want to “withhold applause.” GM, Ford, and Chrysler will have to sell a lot more fuel-efficient cars to meet the average 35 mpg standards in the bill, but “Americans continue to prefer larger vehicles.” And unless the government takes the lead in promoting a “new energy age”—featuring hybrids, clean diesel, and some “shared sacrifice,” like giving up SUVs—the only real “change will be increased prices of automobiles, home heating bills, and plane tickets.”
Well, “progress in automobiles doesn’t come cheap,” says Fortune’s Alex Taylor III in CNNMoney.com, and “both consumers and automakers will wind up paying for the changeover” as Detroit puts the kibosh on SUVs. Volvo is already “performing euthanasia” on its popular XC90 SUV, and GM, Lexux, and others are steering many of their familiar truck-based SUVs to the “automobile graveyard.” The death of the “old-style SUVs” marks “an ignoble end to a proud motoring era,” but the car-based “crossover” SUVs that take their place will probably satisfy all but the “serious off-roaders.”
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