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Opening Arguments

Costly CAFE

Members of Congress and President Bush, thank you for worrying so much about members of the middle class and trying to make sure we have an easier path to travel:

General Motors Corp. Vice Chairman Bob Lutz said Sunday the new fuel efficiency requirements imposed by Congress last month would add $6,000 to the price of an average GM vehicle by the end of the next decade.

That's a more precise estimate than the one Lutz gave at the New York Auto Show in April.

"We've done even more research and it's going to be in the range of $4,000 to $10,000 with an average of about $6,000," Lutz said. "This is going to be a net average of cost of $6,000 per vehicle which will have to be passed onto the consumer. The good news is it won't come all at once, because 35 mpg doesn't kick in all at once."

I don't know that I buy the $6,000 estimate; Detroit has a history of claiming higher costs to meet standards than actually show up. But CAFE standards are stupid -- they won't make Americans use any less fuel, and they won't affect global warming much. Whatever is added to the price by the government's meddling is a cost we shouldn't have to bear.


Mon, 01/14/2008 - 2:42pm

6000 is probably the cost to make a Tahoe meet the standards.

Have you seen how much the Tahoe hybrid costs? $50k. A lot more than a bare bones Tahoe. And while it raises city mileage by 50%, that's only 20 mpg.

The cost to make, say, a Cobalt meet the standards might be less. A 6 speed auto tranny, direct injection, and low rolling resistance tires will do it.

But since CAFE is an average, GM needs small cars that get WELL in excess of 35 to make up for the Tahoes that don't.

I don't think that you could get a Cobalt to get, say, 50, without spending 6 grand on a hybrid powertrain. I think that that is GM's point.

35 is ambitious, no doubt about it. My Saab 9-3 has a turbo 4, a 5 speed automatic tranny, it only weights 3200#, and it only gets 28 on the combined CAFE cycle.