Monday, October 15, 2018

U.S. Automakers Double Down on Trucks & SUVs, Despite Talk of a Cleaner Future

The automakers say they’re headed for an all-electric future and they want fuel economy standards, but their assembly lines tell a different story.

General Motors CEO Mary Barra, along with the chief executives of Ford and Fiat Chrysler, met with President Trump at the White House in January 2017 to discuss U.S. auto emissions standards. (Credit: Saul Loeb/Getty Images) Click to Enlarge.
A year ago, General Motors laid out a bold vision for a transition to a zero-emissions future.  It announced plans for 20 new electric vehicle models by 2023, and CEO Mary Barra wrote:  "Our generation has the ambition, the talent and the technology to realize the safer, better and more sustainable world we want."

But in the U.S. market, GM was aggressively transforming its product line for something else—it was scaling back on cars and doubling down on higher-emissions pickup trucks and sport utility vehicles.

SUVs and other light trucks now make up more than three-quarters of GM's passenger vehicle sales in the U.S., up from less than 60 percent five years ago.  The majority of the 20 planned electric car models are destined for China, where the government has new EV mandates.  The company has announced no plans for electric versions of any of the big vehicles that are its best sellers in the U.S.

"We have ... successfully transitioned to a crossover- and truck-focused business," Kurt McNeil, U.S. vice president of Sales Operations said in a statement to investors early this year.

GM is not alone.  All of the Big Three automakers—GM, Ford, and Fiat Chrysler—have shifted toward big, heavy vehicles that drink more fuel per mile.  In fact, they were in last place for fuel economy among the 13 automakers selling in the U.S. market, according to the EPA's most recent annual fuel economy trends report.

It's an ominous development for climate change, since gasoline is the largest contributor to carbon emissions in transportation—the nation's biggest source of planet-warming greenhouse gases.

It also helps explains why automakers sought President Donald Trump's help in easing the fuel economy and greenhouse gas emissions standards that they had agreed to as part of the 2009 economic bailout.  Trump went farther than the automakers had in mind, however, and he now plans to freeze the standards and abandon the goal of a more than 50 mpg average for the U.S. vehicle fleet, undoing what would be one of the largest steps any nation has taken on climate change.

Relatively low gas prices have helped drive the trend, as consumers are less concerned about the cost of gas guzzlers when fuel prices are low.

But automakers, who make higher profits on pickup trucks and SUVs, have also stoked those sales with marketing muscle and retooled line-ups.  The manufacturers' all-important quarterly earnings have been bolstered as a result.

Advocates of tougher fuel economy standards argue that U.S. automakers are careening down the same risky road they have driven in the past—relying too heavily on vehicles that will be less attractive to consumers when gas prices are high again.

"The American manufacturers haven't figured out how to make money on cars," said Daniel Becker, executive director of the Safe Climate Campaign.  "They only make money on pickup trucks and SUVs.  So they are seizing on temporarily low gas prices and ... politicians like Trump to shift production to the most profitable vehicles they make."

"The number one problem with that is climate," he said.  "But it also will result in the downfall of the American auto industry in a few years when gas prices go back up and they will have gotten out of the business of making cars."

Read more at U.S. Automakers Double Down on Trucks & SUVs, Despite Talk of a Cleaner Future

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