A little publizied act occurred this week that went largely unnoticed and could affect the future availability of Sequoia, Tundra and even 4 Runner . President Obama has forced the big three US carmakers, and their unions, to accept tough mileage rules for cars and SUVs. The rules will cut emissions from vehicles by more than a third over the next four years.
Whether the new rules end America’s love affair with huge cars like Sequoia remains to be seen. But they are being introduced at a time when SUV sales are at a fraction of their peak level five years ago. Their demise coincides with the country’s first mass-produced “plug-in” electric car, which finally rolled off a Michigan production line this week.
From 2016, new cars and SUVs will have to deliver an average of 35.5 miles per gallon, comparable for the first time with European and Japanese requirements.
SUV mileage under the new regime is expected to average 28.8mpg, or nearly three times that of the Hummer H1 that Arnold Schwarzenegger once drove into Times Square in New York to begin the vehicle’s transition from armoured personnel carrier into celebrity runabout.
The new rules end a notorious loophole in US law by which SUVs were exempt from emissions standards that applied to cars. This made them so much more profitable that at the peak of the sport utility boom, a single Ford plant was generating up to $15 million a day in pre-tax profits.
The rules were welcomed yesterday by the industry and environmentalists. Of course, The US Alliance of Automobile Manufacturers, had little choice but to accept the standards after the $25 billion bailout of Chrysler and General Motors.
The Big Three producers will have to spend about $52 billion to upgrade engines, power trains and air-conditioning systems to meet the requirements. The average cost of a new car or SUV is expected to rise by $1,000 as a result, meaning that the future of American motoring depends on consumers’ willingness to pay a modest premium for old-fashioned cars — or a larger one for something very different. Higher prices and an uncertain economy under our present government will most likely cause manufacturers including Toyota to be very cautious with inventory levels on the large vehicles like Sequoia, Tundra and 4Runner.
US motorists have shown repeatedly that their affection for big cars rebounds as gas prices fall, but the new regulations reflect a long-term trend. On average, Ford sold 412,000 Explorer SUVs each year from 1995 to 2003. By 2008 sales had slumped to 78,000. GM has sold the Hummer brand to a Chinese rival and SUV sales fell overall by 52 per cent last year alone.
The new standards are based on a 2007 Supreme Court Ruling that reclassified carbon dioxide as a pollutant. They will be enforced by the Environmental Protection Agency, whether Congress approves or not.