Automakers Face Higher Gas Prices
Fuel prices and fuel economy standards are expected to "rise dramatically" in the next decade, possibly putting further pressure on auto makers in the U.S.
Gasoline will average slightly more than $4 a gallon by 2015 and just more than $5 by 2020, according to a survey of more than 100 automotive manufacturers, suppliers and other experts conducted by the university's Transportation Research Institute Automotive Analysis Division.
They also expect the Corporate Average Fuel Economy, or CAFE, standards for cars to increase from 27.5 miles per gallon today to 33 mpg in 2015 and 38 mpg in 2020. For trucks, those surveyed expect CAFE standards, which are imposed by the federal government on auto makers in the U.S., to rise from the current 21.6 mpg to 27 mpg in 2015 and 31 mpg in 2020.
If the forecasts come to pass, it could lead to changes in buying habits that could create difficulties for auto makers. Though gasoline prices have abated recently, a spike in 2006 led to lower sales of SUVs and pickup trucks. That especially affected U.S.-based auto makers, which rely on the large vehicles for a big portion of their profits. A slowdown in the housing market also led to slower sales of pickup trucks.
U.S. auto makers are investing more in the midsize and small car segments and have increased the fuel efficiency of many of their vehicles. But consumer perception on fuel efficiency, in general, still favors Japanese auto makers.
Auto makers have long resisted changes to CAFE standards, arguing that it ignores the costs involved to companies and consumers to meet those standards. Democrats' regain of control of Congress has led some to speculate that legislators could put CAFE standards on the national agenda.
Auto makers are coming out with new, fuel-efficient systems and those surveyed expect alternative-fueled engines to make up 42% of the U.S. fleet in 2015 and 55% in 2020. Of the five alternative power systems - electric, fuel cell, advanced diesel, hybrid and homogeneous charge compression ignition - the most will be based on advanced diesel and hybrid technologies.
General Motors is expanding the use of its hybrid engines and last week announced a program to develop a plug-in hybrid. Ford Motor said on Tuesday that it's considering adding plug-in hybrid vehicles in the future.
But both GM and Ford noted that battery technology is still years away.
Further, all the work on alternative-fueled engines might not meet the expected new standards fast enough.
Though manufacturers are developing alternative powertrains, they may not be working fast enough to meet the challenges imposed on them by government regulations or by potential dramatic increases of fuel prices. The auto industry may be operating under a false - and potentially fatal - assumption that fuel economy is not a high priority.
Gasoline will average slightly more than $4 a gallon by 2015 and just more than $5 by 2020, according to a survey of more than 100 automotive manufacturers, suppliers and other experts conducted by the university's Transportation Research Institute Automotive Analysis Division.
They also expect the Corporate Average Fuel Economy, or CAFE, standards for cars to increase from 27.5 miles per gallon today to 33 mpg in 2015 and 38 mpg in 2020. For trucks, those surveyed expect CAFE standards, which are imposed by the federal government on auto makers in the U.S., to rise from the current 21.6 mpg to 27 mpg in 2015 and 31 mpg in 2020.
If the forecasts come to pass, it could lead to changes in buying habits that could create difficulties for auto makers. Though gasoline prices have abated recently, a spike in 2006 led to lower sales of SUVs and pickup trucks. That especially affected U.S.-based auto makers, which rely on the large vehicles for a big portion of their profits. A slowdown in the housing market also led to slower sales of pickup trucks.
U.S. auto makers are investing more in the midsize and small car segments and have increased the fuel efficiency of many of their vehicles. But consumer perception on fuel efficiency, in general, still favors Japanese auto makers.
Auto makers have long resisted changes to CAFE standards, arguing that it ignores the costs involved to companies and consumers to meet those standards. Democrats' regain of control of Congress has led some to speculate that legislators could put CAFE standards on the national agenda.
Auto makers are coming out with new, fuel-efficient systems and those surveyed expect alternative-fueled engines to make up 42% of the U.S. fleet in 2015 and 55% in 2020. Of the five alternative power systems - electric, fuel cell, advanced diesel, hybrid and homogeneous charge compression ignition - the most will be based on advanced diesel and hybrid technologies.
General Motors is expanding the use of its hybrid engines and last week announced a program to develop a plug-in hybrid. Ford Motor said on Tuesday that it's considering adding plug-in hybrid vehicles in the future.
But both GM and Ford noted that battery technology is still years away.
Further, all the work on alternative-fueled engines might not meet the expected new standards fast enough.
Though manufacturers are developing alternative powertrains, they may not be working fast enough to meet the challenges imposed on them by government regulations or by potential dramatic increases of fuel prices. The auto industry may be operating under a false - and potentially fatal - assumption that fuel economy is not a high priority.
posted by Ottawa Gas Prices | 7:42 PM
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