Tomorrow, the President is scheduled to visit the DC auto show and see firsthand the fuel efficiency technologies that are a key reason for the Detroit automakers remarkable rebound. As I said in a previous blog responding to last week’s State of the Union speech, the original clean car agreement the administration brokered in 2009 helped lay the foundations for the industry’s recover by putting fuel-efficiency product plans into high gear, just in time for last year’s record high gasoline prices.

I was in DC for the plenary session of the Society of Automotive Engineers DC Auto Show conference last week where I commented that year’s agreement to double standards to the equivalent of 54.5 mpg will ensure this rebirth of the U.S. auto industry as innovation leaders continues. (You can download my presentation to the following technical session here).

Last week was a busy time for environmental auto issues with Chairman Issa holding a hearing on the safety of the Chevy Volt. As I said in my blog last week and my E&E TV interview, unwarranted attacks on the Volt only serve to benefit oil exporting countries, at the expense of American workers.

GM’s CEO Dan Akerson put it better than I ever could when he testified when he said GM did not engineer the Volt to be a “political punching bag”. The next day, GM announced new a new TV ad that focused on the Volt workers in Hamtramck, Michigan. Yes, there are real jobs and real people’s livelihoods at stake here.

I also did a quick live web interview with John McElroy who hosts the popular Autoline TV show.  John and I probably don’t see quite eye-to-eye on whether 54.5 mpg will be good for the auto industry (see his blog here), but I really appreciate his willingness to showcase different perspectives. We had a great talk about the benefits of higher fuel efficiency standards, consumer demand and how the automakers will achieve 54.5 mpg. (You can watch my interview here. I’m at about minute 42).

Finally, my week ended on a high note when a colleague sent me an article about a new finding from none other than JD Power that fuel efficiency is the number one attribute new car buyers are looking for. Here’s a quote from their press release:

The study finds that gas mileage is the most influential reason for purchasing a particular vehicle model in 2012, surpassing the influence of other key reasons such as reliability, the deal and exterior styling, which were the most influential purchase reasons in 2010.

The President’s auto show visit should draw attention to how fuel efficient technologies, catalyzed by stronger standards, is moving the auto industry forward. And that’s good news for consumers, jobs and the environment.

Top safety regulators at the National Highway Traffic Safety Transportation Administration (“NHTSA”) have closed the books on the Chevy Volt safety investigation. NHSTA concluded last Friday that it does not believe the Volt and other electric vehicles “pose a greater risk of fire than gasoline-powered vehicles.”  This is good news for drivers, the economy, and our energy future.

Unfortunately, there are some in Washington D.C. that are attempting to turn a prudent safety investigation into a referendum on our nation’s commitment to clean energy and ending our dependence on oil. Congressman Darrell Issa will hold a hearing today with the country’s top safety regulator, David Strickland, and the CEO of GM, Dan Akerson, as the main witnesses.

Let’s quickly review the facts of the investigation:

• First, no fires have been reported in real-world to be caused by lithium ion batteries that power the Volt and other electric vehicles including the Nissan Leaf, Tesla Roadster, and the hybrid versions of the Hyundai Sonata, Infinity M35, Buick LaCrosse, and Mercedes S400. The Volts in question caught fire under laboratory test conditions that NHSTA and GM were unable to replicate in subsequent tests. With an abundance of caution due to the novelty of the technology, NHTSA chose to launch its safety investigation in the absence of any real world incidents, something it rarely does.
• Second, GM moved quickly to install retrofits that strengthen the battery case and ensure the integrity of the liquid cooling system. Crash tests by both NHTSA and GM of Volts with these modifications have produced no fires.
• Third, gasoline vehicles carry a significant risk of fire.  According to the National Fire Protection Association, there were 184,500 reported vehicles fires in 2010. This is high rate of fire, about 0.75 fires for every 1,000 vehicles.  With about 17,000 Volts and Leafs driven tens of millions miles to date, the first year of electric vehicle experience supports NHTSA’s conclusion that the Volt and other electric vehicles do not pose a greater risk of fire than gasoline-powered vehicles.

The Volt received the highest ratings possible for overall safety from both NHTSA and the independent Insurance Institute for Highway Safety (”IIHS”), neither of which intends to alter its ratings as a result of the investigation.  The IIHS crash tests found no evidence of damage to the Volt's battery packs. "If we had found that the battery pack had been damaged or certainly if we had subsequent concerns about fire risk - that would have raised red flags," IIHS spokesman Russ Rader told Reuters.

Rather than promoting clean energy technologies to get America off oil, electric vehicle naysayers in Washington D.C. have chosen instead to attack the Volt. If successful, these attacks will only serve to benefit oil-exporting countries in the Middle East and elsewhere, at the expensive of workers building electric cars in Michigan, Tennessee, and California. 

Fortunately, Volt owners know better. Ninety-three percent of Volt drivers told Consumer Reports they would “definitely buy (the Volt) again,” the highest ranking of any car ever included in the survey.  That’s a hopeful sign that consumers are ignoring the political theatrics and are voting with their wallets for an oil free future.

In his State of the Union speech, President Obama touted the remarkable turnaround of the auto industry. Critical to this turnaround was the original clean car agreement the administration brokered in 2009. That agreement helped lay the foundations for the industry’s recover by putting fuel-efficiency product plans into high gear. Last year’s agreement to double standards to the equivalent of 54.5 mpg will ensure this rebirth of the U.S. auto industry as innovation leaders continues.

In its entirety for model years 2012 to 2025, the National Program is the most important step taken in a generation to cut our oil dependency and carbon pollution.  And perhaps equally as important to moving our country forward, the clean car agreements exemplify how leadership, partnership, and compromise can help solve the enormous environmental, economic and energy challenges facing our country. 

In a world of unpredictable oil prices, it is the predictability of stronger carbon pollution and fuel efficiency standards that has allowed the auto industry to assert control over its own destiny. Thanks to the original 2009 clean cars agreement to raise standards to 35.5 mpg by 2016, the industry was much better prepared, more resilient and – indeed – thriving in the face of this past year’s record high average gasoline price. In 2011, sales, profits, jobs and fuel efficiency all rose.

54. 5 mpg will spark even more innovation, create even more jobs and cement the rebirth of the U.S. auto industry. Stronger standards will strengthen and grow our economy by investing our energy dollars in the Midwest, not the Middle East.  Over the next two decades, instead of draining our wealth by importing oil, higher standards will result in $300 billion additional revenue for the U.S. auto industry and returning another $200 billion to consumer pockets. As a result, the stronger standards will create 500,000 new jobs.

The latest clean car agreement offers our country a choice. A choice between gridlock and progress. Today, automakers, regulators, labor unions and environmentalists are all working together in partnership, to build markets for clean cars, cut our dangerous dependence on oil and re-invest in American manufacturing leadership.

Let’s hope the few remaining opponents of clean car agreement do not succeed and return us to the dark days of political gridlock. The stakes are high for the U.S. auto industry, American jobs, the environment, and our nation’s future.

The 2012 season for major American auto shows is in full swing, with the Detroit venue running through this weekend, and Washington D.C. starting next week.  Already, we are seeing the year’s auto theme emerging: higher fuel efficiency doesn’t mean sacrifice. And with the newly agreed to 54.5 mpg standard – nearly double today’s cars – consumers will have even more fuel efficient choices in the future.

In fact, the return of the great American car—exemplified by the redesigned 2013 Ford Fusion and 2013 Dodge Dart—demonstrates higher fuel efficiency comes in stylish packages with great performance. Downsized, gasoline turbocharged four-cylinder engines—getting 40 MPG on the highway—are now common. Hybrids are just another powertrain option. And for consumers that want to go oil-free, there are hybrids that can charge batteries from the grid, and a growing number of pure electric cars. 

We’re entering a period of engine and fuel diversification that the auto industry hasn’t experienced in a century.  Moreover, auto engineers are in the midst of a creative renaissance—a period of innovation spawned by the need to maximize the performance and efficiency of smaller engines, sometimes combined with or replaced by electric motors.

Return of the American Sedan: This Time, It’s a Gas Sipper

After decades of neglect of the car market, the stars of the Detroit Auto Show – the midsize Fusion and compact Dart -- are emphatic statements that the great American sedan is back. No longer are American automakers dependent on gas guzzling trucks and SUVs for their profits.

Ford hammers another nail into the era of big-displacement, six- and eight-cylinder cars.  The Ford Fusion can only be purchased with a four-cylinder engine, and the most fuel-efficient version will get the equivalent of 100 miles per gallon (it’s a hybrid that can be plugged into the grid).

The Dodge Dart is the first product from the Fiat/Chrysler marriage. It will get up to 40 mpg, and will help transform the image of Chrysler as solely producing gas-thirsty trucks, full-size SUVs, and hemi-powered vehicles.

Look Ma, Less Cylinders (but Same Power and Less Gas)

There was a time, not long ago, that most car shoppers had three simple choices when selecting what comes under the hood of their new ride: four, six or eight—as in the number cylinders of their gasoline internal combustion engine. 

A new industry-wide focus on fuel efficiency—driven by consumers seeking to save money at the pumps, and automakers seeking to meet raised environment standards—has meant the demise of V8s and a reduction in the number of V6s.

 But don’t think for a second that the grand epoch of four-cylinder engines means a reduction in performance or consumer choice: Just the opposite. With less cylinders, consumers get more technology, such as turbochargers, direct injection, and variable valve timing. Same or more horsepowers and torque, but burns less gas. 

Ford vehicles using the company’s “Ecoboost” brand of small yet powerful engines—joined by new releases from Hyundai’s “Bluemotion,” Mazda’s “Skyactiv,” BMW’s “EfficientDynamics, and others—signals plenty of attractive new models.

Big News is that Hybrids are No Longer Big News

What about hybrids?  They continue to roll out.  Prime examples in Detroit were the Toyota Prius C compact, Volkswagen Jetta Hybrid, BMW ActiveHybrid 5, Mercedes-Benz E300 Hybrid, and Acura NSX concept hybrid. 

So, the big news for 2012 and beyond is that hybrids are no longer big news.  The good news is that more cars will have hybrid options, as one of many different choices of engineering strategies that push the market to new levels of fuel savings and reduced environmental impact.

 Ford Fusion: The Future of Engine Options

The new Fusion exemplifies the growing fuel-efficient powertrain choices being offered to consumers. Like the Hyundai Sonata, there is no six or eight cylinder option available, a current rarity in the midsize market, but the soon to be the new norm.

The 2013 Fusion will be offered with one normally aspirated four-cylinder engine, two turbocharged engines, one hybrid and one plug-in hybrid option.

• The most fuel-efficient gasoline engine option, the 1.6-liter turbocharged, uses a stop-start system—meaning the car’s engine won’t waste gas by idling at stoplights—to deliver 26 mpg city and 37 highway.  
• The hybrid version is expected to yield a city/highway fuel economy combo of 47/44 mpg, besting its arch rival, the Toyota Camry Hybrid.

The plug-in hybrid version, dubbed the Fusion Energi, goes even further, because it can take a charge from household electricity to deliver an MPG-equivalent of more than 100 mile to the gallon. 

You see, the headline here is not that there’s a new hybrid or electric car hitting the market.  It’s this: there’s a hot stylish ultra-popular family sedan that has all kinds of fuel-efficient options, ranging from the direct-injected turbocharged pure gas version, to the hybrid, and finally the plug-in variety. 

 For decades, some auto industry executives have argued that higher fuel economy targets would limit choice.  What we’re seeing in 2012 proves just the opposite: American car shoppers have never had so many compelling options that combine performance, comfort, innovative features and new higher levels of fuel efficiency. 

Unlike the recent years, this year’s Detroit Auto Show is full of optimism. As i discuss in my op-ed in today's Detroit Free Press and  in my speech today in Detroit at the annual Automotive News Congress, the environmental community is committed to doing its part to keep the auto industry moving forward.

That’s why we have joined forces with the 13 automakers, the UAW, consumer advocates, and others to support the Obama Administration’s new proposal to strengthen standards to deliver 54.5 mpg by 2025.

The technologies used to meet the Obama administration’s proposed 54.5 miles-per-gallon carbon pollution and fuel efficiency standards for cars and light trucks will generate as much as $300 billion for the U.S. auto industry, put $200 billion back into the pockets of consumers while securing a global leadership for Detroit in advanced auto innovations for the 21st century.

Unfortunately, there are still some ideologues in Washington D.C., especially in Congress, that want to return us to political gridlock on clean cars. My message today to the auto industry is simply “let’s work together” to build markets for clean cars, cut our dangerous dependence on oil, and re-invest in American Manufacturing Leadership.

The full text of my remarks are below:

STATEMENT OF ROLAND HWANG AT THE AUTOMOTIVE NEWS CONGRESS

JANUARY 10, 2011

GOOD MORNING.   THANK YOU FOR THAT KIND INTRODUCTION.

I AM PLEASED TO BE HERE TODAY ON BEHALF OF THE NATURAL RESOURCES DEFENSE COUNCIL.

A FEW YEARS AGO, I FELT SOMETHING LIKE DANIEL IN THE LION’S DEN ADDRESSING THIS AUDIENCE.  BUT THE TRUTH IS THERE HAS BEEN AMAZING PROGRESS IN THE LAST FEW YEARS … A REAL COMING TOGETHER OF THE MINDS.   NO LONGER IS THERE A HUGE GULF EVERYWHERE BETWEEN ENVIRONMENTALISTS AND THE AUTO INDUSTRY. 

WHILE IT IS TRUE THAT SOME ELEMENTS OF THE INDUSTRY HAVE BEEN SLOW TO WARM UP TO OUTSIDE PERSPECTIVES … OTHERS HAVE BEEN VERY RECEPTIVE.   FOR MY PART, I HAVE TRIED TO BE A BETTER LISTENER AND TO FIND COMMON GROUND WHERE POSSIBLE.   IT SEEMS TO ME THERE IS JUST TOO MUCH AT STAKE HERE FOR EVERYONE INVOLVED … THE AUTO INDUSTRY … CAR CONSUMERS … AND, IN FACT, AMERICANS IN GENERAL.  WE HAVE TO CONTINUE TO FIND WAYS TO WORK TOGETHER … AND I AM COMMITTED TO DOING SO.

TODAY … I AM GOING TO ADDRESS ONE OF THOSE TOPICS WHERE MORE AND MORE PEOPLE ARE FINDING A WAY TO AGREE – AND NOT JUST REFLEXIVELY OPPOSE EVERYTHING THE OTHER SIDE HAS TO SAY.

IMAGINE IF OUR NATION WAS OFFERED A CHOICE OF HOW TO SPEND HALF A TRILLION DOLLARS OF OUR WEALTH OVER THE NEXT TWO DECADES.

ONE OPTION WOULD BE TO SEND $350 BILLION OVERSEAS TO THE MIDDLE EAST AND OTHER OIL EXPORTING COUNTRIES, AND THE REMAINDER ON INCREASING OIL INDUSTRY REVENUES.

AN ALTERNATIVE OPTION WOULD BE TO TAKE THAT HALF A TRILLION DOLLARS AND INVEST $300 BILLION DIRECTLY INTO THE U.S. AUTO INDUSTRY, PUT $200 BILLION BACK INTO CONSUMERS’ POCKETS, AND CREATE HALF A MILLION NEW JOBS WHILE CUTTING EMISSIONS OF DANGEROUS CARBON POLLUTION.

IS THIS CHOICE JUST A PIPE DREAM?   IS IT TOO SIMPLISTIC A WAY TO LOOK AT THINGS?

HARDLY.

IN FACT, WHAT I JUST OUTLINED IS THE PROMISE, BROADLY SPEAKING, OF THE HISTORIC NEW CLEAN CAR AGREEMENT BETWEEN THE OBAMA ADMINISTRATION, CALIFORNIA AND MAJOR CARMAKERS. THEY JOINED TOGETHER LAST SUMMER IN A GRAND BARGAIN TO DELIVER CARS THAT GET, ON AVERAGE, THE EQUIVALENT OF 54.5 MILES PER GALLON BY THE MODEL YEAR 2025, ROUGHLY DOUBLE THE AVERAGE FOR CARS ON THE ROAD TODAY. 

THE ADDITIONAL TECHNOLOGY TO MEET THIS TARGET WILL RESULT IN $300 BILLION IN GREATER REVENUES FOR THE U.S. AUTO INDUSTRY AND ENSURE IT WILL BE A GLOBAL LEADER IN ADVANCED VEHICLE INNOVATION.

STOPPING $350 BILLION FROM BEING SENT OVERSEAS WILL STRENGTHEN OUR ECONOMY, MAKE US LESS VULNERABLE TO OIL PRICE SHOCKS, AND CREATE HUNDREDS OF THOUSANDS OF U.S. JOBS.

AND CURBING EMISSIONS OF CARBON POLLUTION WILL HELP PROTECT OUR ECONOMY AGAINST THE COSTLY IMPACTS OF GLOBAL CLIMATE CHANGE, SUCH AS EXTREME WEATHER EVENTS, LIKE HURRICANES, HEAT WAVES, AND FLOODING.

FORTUNATELY FOR THE AUTO INDUSTRY, IT DOESN’T HAVE TO WAIT TIL 2025 TO SEE THE BENEFITS OF STRONGER STANDARDS. 

IN A WORLD OF UNPREDICTABLE FUEL PRICES, IT IS THE PREDICTABILITY OF STRONGER FUEL-EFFICIENCY STANDARDS THAT HAS ALLOWED THE AUTO INDUSTRY TO ASSERT CONTROL OVER ITS OWN DESTINY.

THANKS TO THE 2009 AGREEMENT TO RAISE STANDARDS TO 35.5 MPG BY 2016, THE INDUSTRY IS MUCH BETTER PREPARED, MORE RESILIENT AND - INDEED -  THRIVING IN THE FACE OF THIS PAST YEAR’S RECORD HIGH GASOLINE EXPENDITURES.  SALES, PROFITS AND FUEL EFFICIENCY ARE ALL ON THE RISE. AND UNLIKE WITH EVERY PAST OIL SHOCKS, GM AND FORD ACTUALLY HAVE GAINED MARKET SHARE THIS TIME AROUND.

54.5 MPG WILL SPARK EVEN GREATER SPARK INNOVATION THAT WILL ENSURE THE REBIRTH OF THE U.S. AUTO INDUSTRY.

BUT I WANT TO BE CLEAR THAT … AS YOU KNOW … THESE INNOVATIONS ARE NOT GOING TO RELY ON SOME IMAGINARY “BLACK BOX” TECHNOLOGY … THIS IS VERY MUCH EXISTING KNOW-HOW … THE SCIENCE OF WHAT ALREADY EXISTS … AS OPPOSED TO “SCIENCE FICTION.”

NOW … I KNOW IT’S UNREALISTIC TO ASSUME THAT OVERNIGHT EVERY AMERICAN IS GOING TO BE DRIVING HOME FROM WORK AND PLUGGING IN THEIR CAR TO CHARGE UP … JUST LIKE THEY DO THEIR CELL PHONES.

ELECTRIC DRIVETRAINS ARE CERTAINLY THE FUTURE OF THE CAR. BUT TO MEET 54.5 MPG, OVER 80 PERCENT OF THE VEHICLES WILL BE STILL POWERED BY CONVENTIONAL--ALBEIT HIGHLY SOPHISTICATED--GASOLINE ENGINES.

THE GOOD NEWS IS THAT’S WHERE THERE IS TREMENDOUS OPPORTUNITY FOR SOME OF THE MOST CONSEQUENTIAL TECHNOLOGY TO COME INTO PLAY.

ADDING A SIMPLE TURBOCHARGER, DIRECT INJECTION TO ENGINES AND CUTTING CYLINDERS CAN DELIVER THE SAME POWER AND DEPENDABLE PERFORMANCE WHILE BURNING LESS GAS. AUTOMATIC AND DUAL CLUTCH, AUTOMATED 8-SPEED TRANSMISSIONS SHIFT FASTER AND ALLOW THE ENGINE TO RUN AT ITS SWEET SPOT LONGER. HIGH STRENGTH, ADVANCED MATERIALS ENSURE CARS WILL BE SAFE AND EFFICIENT. 

THESE INNOVATIONS ARE ALREADY MOVING FROM LIMITED APPLICATIONS IN A HANDFUL OF MODELS … TO WIDESPREAD USE ON ASSEMBLY LINES IN EVERY AUTO FACTORY.

FORD’S VERSION OF THE DOWNSIZED GASOLINE DIRECT INJECTION TURBOCHARGED ENGINE, CALLED THE ECOBOOST, NOW ACCOUNTS FOR 4 OF EVERY 10 F-150S. AFTER JUST BEING INTRODUCED LAST FEBRUARY, IT RECENTLY PASSED THE 100,000 SALES MARK.

SO, WHAT'S THE CATCH?

WELL, AS USUAL, IDEOLOGUES IN THE MEDIA AND IN WASHINGTON D.C.  WHO ARE MORE INTERESTED IN THWARTING ANYTHING THAT EVEN REMOTELY SEEMS “GREEN” THAN DOING WHAT IS BEST FOR OUR NATION, HAVE JOINED FORCES WITH AUTO DEALERS TO TRY TO PRESERVE THE STATUS QUO. THROUGH  COSTLY INVESTIGATIONS AND WASTEFUL LEGISLATION AIMED AT BLOCKING THE NEW STANDARDS FROM BEING IMPLEMENTED, THEY'RE DOING ALL THEY CAN TO SCUTTLE THIS HISTORIC ACCORD , BURY THE BENEFITS IT WOULD PROVIDE, AND RETURN US TO POLITICAL GRIDLOCK ON CLEAN CARS.

AS THEY HAVE IN YEARS PAST, THOSE WHO OPPOSE NEEDED PROGRESS HAVE DUSTED OFF TIRED ARGUMENTS AIMED AT CONVINCING US ALL THAT SOMEHOW AMERICANS DON'T LIKE THE IDEA OF SAVING MONEY AND DRIVING BETTER CARS.

FORTUNATELY, CONSUMERS ARE WAY AHEAD OF THE GAME.

THEY'RE VOTING WITH THEIR WALLETS AND MARCHING IN DROVES TO SNAP UP A NEW GENERATION OF FUEL-EFFICIENT CARS AS FAST AS DETROIT AND OTHER AUTOMAKERS CAN MAKE THEM.

WHERE ONCE SUVS AND V-8S RULED THE ROAD, NOW ONE OUT OF EVERY TWO VEHICLES SOLD IS A SMALL CAR, SMALL CROSSOVER, OR MID-SIZE CAR. THRIFTY 4-CYLINDERS ARE NOW AMERICA’S MOST POPULAR ENGINE CHOICE.

ACCORDING TO TRUECAR.COM, WHEN COMPARED TO THE SAME MONTH THE PREVIOUS YEAR, AVERAGE FUEL EFFICIENCY OF NEW VEHICLES HAS INCREASED FOR THE LAST 15 STRAIGHT MONTHS.

NEW VEHICLE FUEL EFFICIENCY IS - BY FAR - THE SINGLE MOST IMPORTANT CONSIDERATION TO AMERICANS BUYING A NEW CAR, WITH 45 PERCENT OF CONSUMERS CALLING IT THE NUMBER-ONE FACTOR IN THEIR DECISION, ACCORDING TO A NATIONAL SURVEY FORD MOTOR CO. COMMISSIONED LAST FALL.

54.5 MPG WILL BE A BOON FOR CONSUMERS BY EXPANDING THE NUMBER OF FUEL EFFICIENCT OFFERINGS. ALREADY, THANKS TO THE 2009 CLEAN CAR AGREEMENT, NEARLY 4O MODELS OFFERED FOR SALE TODAY CAN ESSENTIALLY MEET THE PROPOSED 2017 FLEET AVERAGE STANDARD OF 36.6 MPG.  THESE MODELS RANGE FROM COMPACT CARS TO PICKUP TRUCKS, INCLUDING THE BUICK LACROSSE, FORD FOCUS AND HONDA ODYSSEY.

CONSUMERS EXPECTING TO PAY MORE FOR A CAR THAT MEETS 54.5 MPG MAY BE SURPRISED.  OVER THE LIFE OF THE VEHICLE, THEY WILL SAVE THOUSANDS OF DOLLARS.  BUT PERHAPS MORE IMPORTANTLY, HOUSEHOLDS BALANCING MONTHLY BILLS WILL SEE IMMEDIATE SAVINGS SINCE THEIR MONTHLY FUEL SAVINGS WILLOUTWEIGH THEIR INCREASED MONTHLY AUTO PAYMENTS.

SO MY MESSAGE TODAY IS SIMPLE: LET’S WORK TOGETHER.

THE LATEST CLEAN CAR AGREEMENT OFFERS OUR COUNTRY ANOTHER CHOICE … A CHOICE BETWEEN GRIDLOCK AND PROGRESS. IMAGINE A TIME WHEN AUTOMAKERS, REGULATORS AND ENVIRONMENTALIST ARE ALL WORKING TOGETHER, IN PARTNERSHIP, TO BUILD MARKETS FOR CLEAN CARS, CUT OUR DANGEROUS DEPENDENCE ON OIL, AND RE-INVEST IN AMERICAN MANUFACTURING LEADERSHIP. 

THE LATEST CLEAN CAR AGREEMENT BROUGHT TOGETHER UNUSUAL BEDFELLOWS IN AN UNPRECEDENTED AND DIVERSE ARRAY OF SUPPORT… FROM AUTOMAKERS TO ENVIRONMENTALISTS, REPUBLICANS TO DEMOCRATS, CONSUMER ADVOCATES TO ENERGY SECURITY ADVOCATES, BUSINESS LEADERS TO LABOR UNIONS.

LET’S HOPE THOSE THAT WANT TO DISRUPT THIS PROGRAM AND RETURN US TO THE DARK DAYS OF POLITICAL GRIDLOCK DON’T SUCCEED... THE CHOICE IS OURS …. AND THE STAKES ARE VERY HIGH FOR THE U.S. AUTO INDUSTRY … AMERICAN JOBS …AND OUR NATION’S FUTURE.  

I LOOK FORWARD TO WORKING WITH YOU TO KEEP THINGS MOVING AHEAD IN THE RIGHT DIRECTION.  THANK YOU!

Last week’s release of the official regulatory proposal for stronger standards provoked a “Nixon goes to China” moment for Detroit car companies. After decades of fighting fuel-efficiency standards and denying consumers want more MPG, GM and Ford both embraced the brave new world of fuel-efficiency. In doing so, they took important steps to remaking themselves into fuel economy leaders.

GM’s Akerson says 54.5 mpg is a “win for American manufacturers”

Just six months ago, recently retired GM executive Bob Lutz was quoted as calling 42 mpg “totally ridiculous”?

But last week in a speech to the Detroit Economic Forum, Chairman and CEO Dan Akerson praised the Obama administration's 54.5 mpg proposal as a “win for American manufacturers”. According to the Detroit News:

Akerson said the uncertainty about future requirements had been "one of the major risks coming into 2011." Under the deal, automakers won't face separate regulations from California and other states

Ford’s Farley admits consumers want more MPG

It’s not every day when an automaker admits that the majority of customers are dissatisfied with their products. But that’s exactly what Jim Farley, Ford's global marketing chief, said last week at the Barclays Capital 2011 Global Automotive Conference:

"There are 240 million people driving vehicles in America and only 32 percent have a good opinion of Ford on fuel economy…That means 68 percent don't."

Mr. Farley laid to rest any doubt that his company is missing the boat on meeting consumer demand for fuel efficiency:

"Fuel economy is ground zero in pricing power in the U.S. for Ford," Farley said. "If you can change perceptions on fuel economy, you can change pricing power across your whole lineup."

"But we have a long way to go," Farley said. "Those that own fuel economy in the U.S. own pricing."

National Auto Dealers Association isolated in their opposition

As if to prove the old saying “you can’t satisfy everybody all the time”, the nay-saying NADA said,

This policy is contrary to what most consumers are actually buying today, despite the wide availability of more fuel efficient models.

But this statement is not only contrary to Ford’s statement, overwhelming evidence in the market place, and in their own words on their own website:

New or used, fuel-efficient cars are hot. The clamor for hybrids is rising as fast as gas prices, and even some older-model hybrids are gaining new interest — the MY isn’t nearly as important as the mpg. High-mpg cars sell themselves. Hybrids and four-cylinder models are flying out the door.

Of course not all auto dealers agree with their lobbying association. In a recent op-ed in Automotive News, car dealers Chuck Frank and Adam Lee state:

We don't understand our fellow dealers who oppose the new mileage goals. Why would you oppose fuel economy standards that are good for your customers, good for the country and good for business?... Some NADA members might automatically oppose government regulation of any kind. Others might worry that higher mileage standards will hurt their business, despite historic evidence to the contrary. But putting your fears ahead of your customers' needs is not a great business strategy. There is no conflict between the higher mileage that customers want and the desire of dealers to sell more cars and increase their profits.

With overwhelming support including automakers, the UAW, and consumers, it’s time for NADA to have its own “Nixon goes to China moment” and support the new standards.

[This blog amended on 11/16 10 am pdt to update the number of House member signers from 108 yesterday to 111 today.]

This week, perhaps as early as tomorrow, the Obama administration is expected to release the official regulatory proposal to strengthen carbon and fuel efficiency standards for new cars and light trucks build between 2017 and 2025. New polls from consumers and small business groups, and a letter from House members demonstrate that public and political support for the standards remains strong.

The new standards were originally announced on July 30 by the President with the support of 13 automakers and many other stakeholders. These standards are expected to deliver the equivalent of 54.5 mpg by 2025 and cut carbon pollution from new cars and light trucks in half. We expect the details of the proposal to be consistent with the Supplemental Notice of Intent released July 30th, which I summarized in an earlier blog.

Strengthening standards will deliver tremendous consumer, energy and pollution benefits. So it’s no surprise it enjoys virtually unprecedented breadth and depth of support across the economic and political spectrum, from automakers to environmentalists, Republicans to Democrats, consumer advocates to energy security advocates, business leaders to labor unions.

The few opponents—some members of Congress (led by Darrell Issa, R-Calif, and Steve Austria, R-Ohio) and the National Auto Dealers Association--are badly out of step with public support for stronger standards and the consumer demand for fuel-efficient cars.

New polls finds Consumers and Small Businesses Support Strong Standards

Consumers have spoken: They overwhelming support 55 mpg and continue to demand fuel-efficient cars.

• Consumers support strong standards. The highly respected consumer advocacy group, Consumer Reports, just released on monday a new poll that found 80 percent of consumers agreed that “fuel economy standards should require auto manufacturers to increase the overall fleet average to at least 55 miles per gallon by 2025…”
• Consumers are demanding fuel-efficient vehicles. According to the latest survey from industry research and forecasting company TrueCar.com, the average fuel economy of light vehicles sold in October rose to 22.2 miles per gallon in October compared to 21.5 mpg in the year-earlier period.

Small businesses also understand that enhanced fuel efficiency is good for the economy. According to a poll released just today by the Small Business Majority, 80 percent of small businesses surveyed support a 60 mpg standard by 2025.

111 House members support strong standards

Despite the overwhelming support, some in Congress have not given up their quixotic quest to block the standards. Rep. Darrell Issa, R-Calif., continues his “investigation” of the agreement.  Rep. Steve Austria, R-Ohio, has not dropped his amendment to block EPA from implementing the standards.

Just today a new House letter expressing strong support for the new standards was sent to the President with signatures from more than 111 members of Congress, including Reps. Edward Markey, D-Mass, John Dingell, D-Mich., and Henry Waxman, D-Calif. This is far more than the 66 members that signed the  letter sent October 20th to House Appropriations Committee Chairman Harold Rogers, R-Kentucky, supporting Austria’s amendment.

Notably, key Michigan House members that in the past have sided with automakers and opposed stronger car standards are now taking a different tact, signaling the auto industry remains committed to the agreement. In fact, Rep. Dingell, D-Mich., helped co-sponsor the “dear colleague” letter urging other Congress members to sign onto the supportive letter to the President. Noticeably absent from the Austria letter is Rep. Upton, R-Mich., now Chairman of the House Energy and Commerce Committee, who previously led the charge attacking EPA’s vehicles authority.

Rep. Austria was for clean cars before he was against them 

Oddly enough, Rep. Austria appears to be both for and against government programs to support the development of clean cars. At the same time he is trying to block stronger standards, he has supported a DOE battery plan loan for his district in Ohio.

Key Administration decisions on clean energy

These clean car standards combined with two other key Administration decisions on power plants and pipelines are helping to put this country on the right path to a clean energy future.

• Early this month, the Administration announced its plan to also move forward with carbon pollution standards for new power plants. Together, cars and power plants account for half of our nation’s carbon pollution.
• Just last week, the Administration announced it would delay its decision to approve the Keystone XL pipeline pending further environmental review. The pipeline would carry tar sands from Canada and keep America and the world dangerously dependent on even dirtier forms of oil.

The proposed clean car standards for 2017 to 2025 demonstrates how leadership, partnership, and compromise can help solve the enormous environmental, economic and energy challenges facing our country.  Unfortunately, Reps. Issa and Austria and the National Auto Dealers Association, for reasons unclear to me, are attempting to block the program, drive up fuel costs, increase air pollution and make us more dependent on oil.

Last Wednesday, I testified in front of the House Oversight Committee on Regulatory Affairs. It was political theater by Chairman Issa at its worst. He came in too late to hear my testimony and then took a puzzling, direct swipe at NRDC.

The members of the committee from the House majority attempted to show consumers don’t want fuel-efficient vehicles, the technology to meet 54.5 mpg is too expensive, and the process was broken.  But on every point, the House majority subcommittee members were frustrated in their attempts to make any headway. It’s time that Congress get on with the business of solving our environmental, energy and economic problems , and get out of the way of real solutions like the latest clean car agreement.

Fuel efficiency one of the most “important factors” for consumer, according to… Edmunds

The House majority committee members brought in Jeremy Anwyl, CEO of Edmunds.com , apparently to represent the voice of the consumer. Here’s an excerpt from Mr. Anwyl’s testimony:

Any study of actual sales makes clear that—for the vast majority of consumers—fuel economy is simply not their primary motivating factor when purchasing a vehicle. It doesn’t mean they don’t care about fuel economy—just that other things are far more important.

But here’s a New York Times newspaper article that cites Mr. Anwyl just two days later:

Fuel economy is among the chief considerations for consumers looking for a new vehicle, according to the automobile research Web site Edmunds.com.

“It’s one of the most important factors that people consider when buying a new car,” said Jeremy Anwyl, the chief executive of Edmunds.

As my testimony shows, based on actual sales data, there is really no plausible case to be made that the majority of customers don’t highly value fuel efficiency. As I point out in my testimony:

Where once truck-based SUVs and V-8s ruled the road, now one out of every two vehicles sold today is a small car, small crossover, or mid-sized car. And thrifty 4 cylinder engines are now America’s most popular engine choice. 

Mr. Anwyl states in his written testimony “vehicles consumers have demonstrated a marked preference for larger vehicles…”, but neglects to mention that these “larger vehicles” are actually highly fuel-efficient crossover utility vehicles, not truck-based, gas-guzzling traditional SUVs. The recent uptick in relatively fuel-inefficient pickup truck sales? According to Edmunds.com Auto Observer, this increase market share appears “was bought largely with increased incentives.”

Of course, if the House majority subcommittee members wanted consumers’ perspectives represented, rather than auto dealers, then they could have easily invited the highly respected Consumers Union, the nonprofit publisher of the popular Consumer Reports, or the Consumer Federation of America, a non-profit association of 300 consumer groups across the country. Of course, these two actual consumer groups support the new clean car agreement so their perspective didn’t fit with the tenuous case the House majority subcommittee members wanted to make.

What do the House majority subcommittee members have against getting off of oil and creating jobs?

Electrifying transportation is one of our best options to finally break our oil dependency and is critical to the future competitiveness of the U.S. auto industry. For better or worse, electric vehicles like the GM Volt are not needed to meet the 54.5 mpg standards. Ample technologies to improve gasoline-powered cars exist to meet the standard without relying on  battery electric vehicles and plug-in hybrids.

So why did Republicans on the committee spend so much time attacking the GM plug-in electric vehicle, the Volt? Their claim seemed to boil to the cost being too high and demand too low. But the GM Volt has been on the market less than a year and is the first of a new breed of cutting edge of technology. It appears some in Congress are willing to attack a made-in-America product just to try to score some political points.

The benefits are overwhelming, including and especially for drivers and job creation. Drivers will have more money in their pockets immediately in the form of lower monthly vehicle and fuel payments. By 2030, net fuel savings, after considering the additional fuel-efficiency technology costs, will be equivalent to $330 tax rebate for every American household. This higher level of investment in the U.S. economy and reduced fuel bills will result in roughly half a million more jobs by 2030.

 As I said in my testimony, in view of its overwhelming benefits and overwhelming support, if anything, Congress should be urging the agencies to implement this important program sooner rather than later.  This week’s hearing makes it clear that Chairman Issa attempt to throw up a roadblock to the latest clean car agreement has finally hit a dead end.