DETROIT - The Associated Press says President Obama will release new vehicle emission standards Tuesday that effectively move up the 2020 Corporate Average Fuel Economy standards of 35 mpg up to the year 2016. The good news is that Obama is expected to call for one national standard, and won't let California plus 13 other states and the District of Columbia set their own, harsher standard.
Obama's new standard comes as Chrysler LLC slogs though the first 30 days of its pre-arranged Chapter 11 bankruptcy, and in preparation for a now-inevitable Chapter 11 for General Motors.
What does this mean to us? Let's take Chrysler. It has a new 300 and Dodge Charger on the boards, scheduled for the 2011 model year. The new, full-size, rear-drive LXes will be available again with Hemi V-8s, but Chrysler probably would emphasize its new, 3.6L V-6, originally called "Phoenix" and developed with Mercedes-Benz and Hyundai, now renamed "Pentastar." The second-generation Chrysler 300/Dodge Charger's lifecycle should end after the 2016 or '17 model year, based on their current lifecycles.
The easy thing for Chrysler to do would be to end 300/Charger production by the 2016 model year, when the new standards are likely to kick in. Of course, Fiat Auto will have a great deal of say on whether Chrysler continues to build anything larger and thirstier than the Italian company's own models.
On the other hand, Chrysler could take the attitude of Hyundai's John Krafcik, and design a third-generation LX, perhaps the Chrysler version only, that would become a low-volume flagship car by design, rather than consumer demand. That's what Hyundai plans for its new rear-drive Genesis sedan and coupe (and possibly, the Equus) while selling high-volume, front-drive small cars to meet the 35-mpg CAFE. And to make a third-gen 300, Chrysler could look to technology like ex-owner Daimler's 2.2L turbodiesel-powered Mercedes E250 Bluetec, with an expected 28/39 mpg EPA rating, or 32.1 mpg average. Close to the 35-mpg average with a large, rear-drive sedan. And the diesel four is said to make nearly as much torque as Mercedes' own turbodiesel V-6.
A 32.1-mpg diesel puts out 0.69 pounds of CO2 per mile, versus 0.60 per mile for a 32.1-mpg gas-powered car. But it's still close enough to the standard that Mercedes could sell some of those as long as it sells a larger number of, say, B-Classes and C-Class hybrids.
And keep in mind that the CAFE standard as written based on the 2007 law uses a "footprint" to determine the standard. The National Highway Traffic Safety Administration, which wrote the rule, wants all cars and trucks, big and small, to show improved fuel economy by '20, by meeting a complicated formula. Now Obama wants to apply that standard four years early, to meet his goal of reducing greenhouse gases by 30 percent. (The Detroit Bureau reports that the 2016 car standard will be 40-mpg and the truck standard will be 26 mpg. Under the NHTSA standard for 2020, both cars and trucks were to meet a 35 mpg CAFE standard.)
We can complain all we want. Automakers did, and prevented any increases in the 27.5-mpg standard since 1985. Now they'll have to rush to meet a new standard in roughly one model lifecycle. The new rule will make it hard for anyone -- from GM, Ford and Chrysler to Toyota, Nissan, BMW and Volkswagen -- to sell any V-8s in volume and to sell large, high profit-margin cars and trucks. Honda's on-hold V-8 and rear-drive Acura platform undoubtedly will be on hold indefinitely.
Only Hyundai and Mercedes, so far, have indicated they have the foresight and the plans to keep large rear-drive cars in showrooms after 2016.