TribLIVE

| Business

 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

New fuel standards spur change

Email Newsletters

Click here to sign up for one of our email newsletters.

On the Grid

From the shale fields to the cooling towers, Trib Total Media covers the energy industry in Western Pennsylvania and beyond. For the latest news and views on gas, coal, electricity and more, check out On the Grid today.

'American Coyotes' Series

Traveling by Jeep, boat and foot, Tribune-Review investigative reporter Carl Prine and photojournalist Justin Merriman covered nearly 2,000 miles over two months along the border with Mexico to report on coyotes — the human traffickers who bring illegal immigrants into the United States. Most are Americans working for money and/or drugs. This series reports how their operations have a major impact on life for residents and the environment along the border — and beyond.

By Larry Printz
Friday, April 19, 2013, 9:27 p.m.
 

Looking at the dozens of new models introduced at the New York International Auto Show, it's clear that the industry is undergoing dramatic change, most of it driven by tough new fuel economy standards. The EPA's Corporate Average Fuel Economy mandate — also known as CAFE — requires that an automaker's fleet average 29 mpg. That will rise to 36.6 mpg in model year 2017, a mere three model years from now, on its way to a lofty 54.5 mpg by 2025. That may sound far away, but it's not as distant as it sounds.

That poses a problem for luxury automakers, whose vehicles tend to be thirsty. It's easy to sell a buyer of a low-priced or moderately priced car on one with a smaller engine; it's much harder to convince luxury buyers of the same thing.

Larger models are becoming more efficient through the use of diesel or turbocharged engines, eight- and nine-speed transmissions, and costly lightweight materials, such as aluminum and carbon fiber. But it's not enough to get the job done.

Consider the midsize Mercedes-Benz E350 sedan. It returns 23 mpg in combined city/highway driving, according to the EPA. At 26 mpg, the E400 Hybrid is more fuel-efficient, but not nearly enough to meet the new rules. So it's easy to understand why Mercedes-Benz is introducing the CLA in September. It's a compact sedan with a thrifty four-cylinder engine that starts at less than $30,000. Given this is about the same price as a mundane midsize sedan, the car should be a game-changer for the brand and the marketplace.

The German auto manufacturer has revealed a subcompact five-door hatchback that runs solely on electricity, the B-Class. Its price will be close to that of the Chevrolet Volt.

Mercedes-Benz is not alone.

BMW's most popular vehicles, the compact 3 Series and subcompact 1 Series, suffer from fuel economy that belies their size. BMW has downsized engines and will offer a diesel variant of the 3 Series later this year. It will be joined by the i3, an electric car that will offset the thirsty ways of other BMW models.

Cadillac is taking a similar path. Earlier this year, at the Detroit auto show, General Motors' luxury marque introduced the Cadillac ELR, a plug-in hybrid electric car that shares its running gear with the Chevrolet Volt, rated by the EPA at 62 mpg.

They're following the example set by Lexus. Its flagship sedan, the LS 460 L, returns an OPEC-friendly 19 mpg, while the LS 600h L hybrid returns 20 mpg. Both cars cost close to, or more than, six figures. The entry-level Lexus, base price $32,050, is a subcompact hatchback that's rated by the EPA at 42 mpg.

Despite the flood of alternative-fuel vehicles, they accounted for just 3.3 percent of the U.S. market in 2012, according to auto industry publication Ward's Auto. By contrast, the Ford F-150 pickup truck accounted for 4.5 percent.

So, why are automakers releasing electric cars and hybrids given their meager sales? It's simple: Under the new EPA rules, every electric car sale is counted as two sales when it comes to CAFE compliance.

But you have to wonder what this means for luxury brands. The prestige of any luxury label is based on its scarcity and its pricing. If you can buy a Mercedes-Benz or BMW for little more than a loaded Honda Accord, is it a luxury car or is it a pretender?

That's for the marketplace to decide.

Larry Printz is automotive editor at The Virginian-Pilot in Norfolk; larry.printz@pilotonline.com.

Subscribe today! Click here for our subscription offers.

 

 


Show commenting policy

Most-Read Business Headlines

  1. Shell shovels millions into proposed Beaver County plant site
  2. Muni bond funds stressed
  3. Off-duty but on call: Suits seek overtime
  4. $2-per-gallon gas expected by year’s end, but not in Western Pa.
  5. Post-Gazette offers voluntary buyouts in bid to avoid layoffs
  6. Extended oil slump takes toll
  7. Companies hand out perks, benefits instead of pay raises
  8. When it comes to home ownership, Hispanics finding locked doors
  9. Small business hangs on fate of Export-Import Bank
  10. Credit score insight from FICO executive
  11. Of Caitlyn Jenner and workplace restrooms