Cafe Oy Vey

Today's CAFE standards rise will end up causing the cost of vehicles to rise since the standards are being put into place within a framework of safety features which weigh down vehicles. There are only two ways to get more mileage out of a conventional engine, either reduce the weight or improve the engine efficiency. Since the internal combustion engine is pretty peaked in the efficiency we can get out of it, and the safety features won't go, then the next best course of action is to experiment with new materials to cut weight. These carbon fiber parts will greatly reduce the weight, but will cause the price to sky rocket since carbon fiber has higher manufacturing costs than plain steel.

Further, the CAFE standards include trucks, which means that some creative accounting is gonna occur to get the numbers to add up to an average of 36 MPG. Most likely what will happen is that small cars and hybrids will shoot up the numbers and trucks will gain maybe one or two MPG, since there is not a lot of gain without sacrificing torque. In short, the long term impact on auto prices from CAFE standard increases is to raise the price of automobiles for the sake of saving fuel. This will not make economic sense since the fuel savings for small passenger car drivers from an upgrade, even to a Prius, is just not there. Driving 12,000 miles per year, at $4 a gallon, you are looking at a longer time than the vehicle life to break even if you switch from a used Civic to a Prius. Sounds like a bad deal to me.