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Old 07-07-2007, 03:53 PM   #11
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Originally Posted by northboundtrain View Post
I'm just wondering if buying a fuel efficient vehicle like the prius actually does any good on the macro level. If you buy a 50 mpg car and that allows one more 25 mpg car to be manufactured and sold, then you haven't achieved anything beyond if you had bought a 35 mpg car which then put another 35 mpg car on the road somewhere.

I guess the point is that the effect of the CAFE standards is to incentivize the auto makers to push the low FE cars harder if they can produce enough high FE cars to offset them. One step forward, one step back.

I think that you need to separate your macro analysis into two separate processes: 1) manufacturing 2) sales.

In the manufacturing process the manufacturer incurs the costs of manufacture of the cars. The manufacturers recover the costs of the car making process by selling them to the various dealerships. So at this point, it's up to the dealerships to control what is available for sale to the public. The economic concern at this point are the potential economic costs of wasted funds used to make a product that won't be sold.

In the sales process, the dealership offers for sale whatever they purchased from the manufacturer. So the main key ingredient of the cars we wee on the streets are the consumers purchasing the vehicles. Now, this is where the dealership salesperson and the consumer interact which depends on how much research the consumer has done prior to showing up at the dealership. If the consumer has done a lot of research then they, like us here at GasSavers, would probably opt for the more fuel efficient vehicle. However, if the consumer isn't as well educated then they may be easy prey for the salespeople to purchase the less fuel efficient vehicle. Not only easy prey for the salespeople but the marketing/advertising machine bent on "helping" us choose the less fuel efficient vehicle.

So, I guess we can have the biggest impact by being the "consumer educators" to the fuel efficient ways so that more fuel efficient vehicles are purchased instead of the less fuel efficient vehicles. Going back to the "macro view" you mentioned, we could send the "message" back from the dealership to the manufacturers that we want more fuel efficient vehicles by letting the less fuel efficient vehicles sit on the dealership lots unsold.

As far as your "one step forward, one step back" comment, I feel that it may be more than just one step backwards from a pure mathematical average perspective. For example, let's say the baseline fuel efficiency is 20 mpg. Now, let's say two cars are made, car 1 has 25 mpg and car 2 has 15 mpg. On average, they're both 20 mpg.

However, let's expand our "assembly line" to three cars. The first car is the higher fuel efficiency and cars 2 and car 3 are the low fuel efficiency cars. Let's say the first car can achieve 30 mpg with the target average fuel efficiency of 20 mpg. Using a little algebra, that means the other two can have 15 mpg. So right here, we can see that it's "one step forward, two steps back."

Expanding the assembly line to four cars, with the one fuel efficient car getting 40 mpg with the same 20 mpg average, works out to the other three cars may have 13.3 mpg each to help maintain the 20 mpg average.

So, you're right with the original post. So sounds like the solution would be to change CAFE from an "average fuel efficiency" to a "minimum fuel efficiency" standard.

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Old 07-07-2007, 04:22 PM   #12
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Originally Posted by rGS View Post

So, you're right with the original post. So sounds like the solution would be to change CAFE from an "average fuel efficiency" to a "minimum fuel efficiency" standard.
Yeah, Suppose the CAFE standards specified maximum percentages of a manufacturer's fleet that could fall below the baseline and minimum percentages of the fleet that had to be above the baseline. So say the baseline is 30 mpg. 10% maximum of the fleet can be below 25 mpg. Another 40% max can be below 30 mpg. The remaining 50% all must be better than 30 mpg with say a minimum of 10% being above 35 mpg. This would eliminate the mpg trade-offs that manufacturers can currently engage in.

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