NHTSA Proposal Will Require Different MPG for Different Companies

The NHTSA proposal to increase fuel economy standards by 2015 to 31.6 mpg keeps getting stranger. As analysts wade through the (over) 400 page document, the following little tidbit has been discovered. It seems that because car manufacturers have different mixes of vehicle sizes, and the new rules are being set based on size of the car (footprint), each manufacturer will end up with a different standard to pass before they face any penalties.

Required CAFE Levels (mpg) for Passenger Cars

Manufacturer	MY 2011	MY 2012	MY 2013	MY 2014	MY 2015
BMW	33.3	35	36	36.8	37.7
Chrysler	28.7	29.3	32.2	32.6	33.6
Ferrari	30.4	32	33.1	33.9	34.9
Ford	31	32.7	33.7	34.5	35.5
Fuji (Subaru)	36.9	38.7	39.6	40.1	40.8
General Motors	30	31.7	32.8	33.7	34.7
Honda	32.1	33.8	34.8	35.5	36.4
Hyundai	33.4	35.1	36	36.7	37.5
Lotus	38.1	40	40.8	41.2	41.7
Maserati	28.9	30.6	31.8	32.8	34
Mercedes	31.7	33.3	34.4	35.3	36.2
Mitsubishi	33	35.1	35.9	37	37.9
Nissan	31.2	33.2	34.2	35	35.9
Porsche	37.6	39.4	40.3	40.7	41.3
Suzuki	37.3	39.2	40.1	40.6	41.2
Toyota	30.1	31.5	32.7	33.6	34.6
Volkswagen	35.4	37.2	38.2	38.8	39.5
Total/Average	31.2	32.8	34	34.8	35.7

Required CAFE Levels (mpg) for Light Trucks

Manufacturer	MY 2011	MY 2012	MY 2013	MY 2014	MY 2015
BMW	28.2	29.9	31.2	31.4	31.7
Chrysler	25.2	26.6	28	28.5	29.1
Ford	24.7	26.1	28	28.3	28.8
Fuji (Subaru)	30	31.7	33.1	33.2	33.4
General Motors	23.9	25.4	26.5	27	27.4
Honda	26.1	27.7	28.9	29.2	29.6
Hyundai	27.5	29.1	30.4	30.6	31
Mercedes	28.4	30.1	31.4	31.6	31.9
Mitsubishi	29.4	30.8	32.2	32.3	32.6
Nissan	24.9	26.2	27.3	27.7	28.2
Porsche	25.9	27.4	28.7	29	29.4
Suzuki	30.3	32.1	33.5	33.5	33.7
Toyota	24.9	26	27.2	27.6	28
Volkswagen	26.2	27.8	29	29.3	29.7
Total/Average	25	26.4	27.8	28.2	28.6

As you can see, the larger companies, because of their mix of cars, are going to have lower standards to pass than the smaller companies. Lotus, for instance, will need to get up over 38.1 mpg in 2011, while at the other end of the spectrum, Chrysler only has to get 28.7 mpg.

The NHTSA estimates that if each manufacturer meets the minimum requirements each year, they industry wide average for mpg will reach 31.6 mpg by MY 2015.

MY 2011: 27.8 mpg
MY 2012: 29.2 mpg
MY 2013: 30.5 mpg
MY 2014: 31.0 mpg
MY 2015: 31.6 mpg

The proposal also outlines the ways the manufacturers could meet their obligations, specifically, by using fuel saving technologies. The NHTSA estimates the mix of technologies could look like the following for the seven major manufacturers by MY 2015. The following table shows both an average and a maximum value of technology penetration.

Estimated Technology Penetration Rates in MY2015 for Passenger Cars and Light Trucks

	Average Among Seven Largest Manufacturers			Maximum Among Seven Largest Manufacturers
Passenger Cars	Product Plan	Adjusted Baseline	Under Proposed Standard	Product Plan	Adjusted Baseline	Under Proposed Standard
Automatically Shifted Manual Transmission	10%	10%	39%	59%	59%	86%
Spark Ignited Direct Injection	22%	22%	30%	76%	76%	82%
Turbocharging & Engine Downsizing	5%	5%	17%	11%	11%	51%
Diesel Engine	0%	0%	2%	0%	0%	5%
Hybrid Electric Vehicles	5%	5%	15%	14%	14%	19%
Light Trucks
Automatically Shifted Manual Transmission	10%	14%	55%	41%	41%	72%
Spark Ignited Direct Injection	23%	24%	40%	46%	46%	73%
Turbocharging & Engine Downsizing	9%	11%	31%	32%	32%	44%
Diesel Engine	3%	6%	10%	7%	29%	45%
Hybrid Electric Vehicles	2%	6%	25%	5%	13%	32%

I'm very surprised to see the low rates for diesel cars, but not by the high rate of hybrid electric vehicles being projected.