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William Maley

Industry News: Marchionne Comments On U.S. Fuel Economy Standards

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FCA CEO Sergio Marchionne is known to speak his mind and tell it like it is. During the Automotive News World Congress, Marchionne questioned the U.S. Government's mandate of 54.5 MPG by 2025.

"There is not a single carmaker that cannot make the 54 number. The question is, at what a price?" said Marchionne.

A possible reason for the CEO of FCA to bring this up is gas prices around the nation are hovering around $2.00. Also, sales of hybrids and electric vehicles have been declining, partly due to gas prices. Now many executives say that low gas prices will pass and that they will continue in investing in newer technologies.

Now Marchionne does agree automakers can meet that deadline, but questions the timeframe of when it will be implemented.

"The question is whether 2025 is a realistic date for which to achieve it," Marchionne said. "Fifty-four will not change. The date of implementation might."

Marchionne also went on to rail the Government's plans for subsidizing electrification technology.

"Let the automotive industry get there. We'll find a way to get there in the most cost-efficient way. Don't tell me that I need to have electrification as the answer. It's improper."

Source: The Detroit News, Detroit Free Press

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I think most of us would agree that we hate the Gov mandating MPG for Auto's.


One place I do not agree with is subsidizing new technology. For a limited time using tax dollars to prove alternative concepts work is a good thing. But now that we know EV's can be done, time to get rid of the subsidizing and let the market play out.

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Not just "at what a price", but "at what cost".


One way to increase economy is to lighten the vehicle.  Lighter vehicles do less well in real-world collisions than heavier ones (insert physics here).  How may lives would lighter vehicles cost when they come against, say, a current-model Tahoe?


Another is electrification.  Okay, so that adds how much to the weight and cost of the car?  How about the environmental impact to the areas around all those battery factories?  Lost of nasty chemicals in batteries.  Has anyone ever done a net environmental impact study on a hybrid/electric vs a traditional internal combustion?  Not sure these "modern" vehicles are near as clean as the enviro-nuts would want us to believe.


The government should stop creating new subsidies, period, then curtail existing subsidies.  Might have to lay off a few bureaucrats, but we'll get a much better idea of what works, what doesn't; what's efficient, what's not; and what's too damned expensive to survive.


There's more to look at here than JUST economy numbers, and the government either doesn't get that, or doesn't care.

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If the government can legislate scientific change with actual fuel economy in automobiles, then why stop there?  Why don't they pass a law to have the flux capacitor, warp drive, and cold fusion to become a reality?


Enough with the snark, here are two points that need to be addressed.


1.  The industry will invest a LOT of money to comply with this mandate but what ever solutions that are found will not be the final answer.


2.  You cannot force the public to buy all options.  Eventually a few or one solution will be determined by the market and there is just no way to predict in the next 10+ years what that might actually be. 


This will be the VHS v. Beta battle only at a much LARGER scale of risk.

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I think anyone who frequents this board knows my position on this issue.  It is intrusive, destructive and unnecessary to mandate fuel economy standards.  People should have the freedom to choose what they want to drive.  Let the customer decide!

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