just-auto.com

USA: Pros and cons of new California emission proposals get an airing

By just-auto.com editorial team | 29 September 2004

Automakers, already burdened with profit-eroding incentives and rising costs, face the expensive prospect of overhauling car and truck designs if California's reduced emissions rules go through, an auto industry group told Reuters.

California air-quality regulators on Friday adopted the nation's first-ever rules to reduce emissions of carbon dioxide and other gases by cars and trucks by as much as 25%, beginning with the 2009 model year, with cuts accelerating to as high as 34% in 2016, the report noted, adding that the regulations must still be approved by the California state legislature.

"They are proposing that we build vehicles that don't exist today using a combination of technology. ... It's a theoretical vehicle," Gloria Berquist, spokeswoman for the Alliance of Automobile Manufacturers told Reuters.

Automakers reportedly argue that too many rules could add costs that consumers may not be willing to pay.

The regulations, which are likely to prompt tough pollution standards in other states, are expected to raise the price of new vehicles by about $US3,000, according to industry analysts told the news agency.

Reuters noted that California's action comes at a time when the auto industry, especially automakers in Detroit, is weighed down by profit-eroding incentives and slowing sales. A key issue for Detroit is whether the lower emission standards can be engineered into vehicles at manageable costs.

"A 25% improvement in emissions can only come about with 25% improvement in fuel economy," Sean McAlinden, chief economist at the Centre for Automotive Research, told the news agency. That could force automakers to reduce sales of gas-guzzling sport-utility vehicles and pickup trucks in California, which accounts for nearly 13% of the US auto market.

Automakers also will have to retool engine and assembly plants to put the technology in place, McAlinden reportedly said. But some say the costs will be recovered in a few years.

The Union of Concerned Scientists, a Washington, DC-based environmental group, told Reuters the technologies will pay for themselves in about three-and-a-half years.

"This regulation is among the most cost-effective to date, with virtually all of the technological improvements paying for themselves before the new car smell is gone," Louise Bedsworth, senior vehicles analyst with the Union of Concerned Scientists said in a statement cited in the report.