EnergyStar for Cars

U.S. auto sales hit a 16 year low in July, with the double whammy of high gas prices and tight credit hitting U.S. auto makers especially hard. General Motors sales dropped a whopping 27 percent, and GM reported a $15.5 billion loss in the third quarter on revenues of $38 billion. (These are such large numbers that the bear repeating: GM posted a $15.5 billion loss in just three months). So I doubt U.S. automakers are hankering for ways to make it even more transparent to consumers that the majority of their cars are fuel inefficient. Hearings were held today by the NHSTA on new standards that would require 35 mpg for the U.S. auto fleet by 2020 (vs. today’s 25 mpg average). And if you ever wanted proof that a picture isn’t always worth a thousand words, check out this photo of the hearings. Huh??

I’m assuming that the standards will be postponed or watered down in some significant way. So here’s an interim step that might be harder for the Big Truck Makers to fight: why not require every new car to have, on the sales slip that’s posted in the window, an estimation of the cumulative fuel cost of the car over 1, 3 and 5 years?

To keep things simple, and to lay off American car makers for a second, imagine you want a family car and walk into the Toyota dealership to compare the hybrid Prius to the minivan Sienna. They both can be had for about $27,000 with some options. Don’t you think more consumers would make the environmentally friendly choices if they saw on the sticker that, over 5 years driving 12,000 miles a year, the Prius would save them almost $9,000 on gas (for those who don’t trust my math: $5,870 worth of gas versus $14,211 at $4.50/gallon using the ‘official’ mileage numbers, which are way too high).

This has been tried before with the Energy Star labeling program, which apparently has saved $14 billion in energy costs. What if Toyota, which is already way out in the lead with the Prius, leveraged their advantage and took the step of voluntary labeling their showroom cars in this way? Don’t you think consumers would come to expect it and the Big Three would be forced to respond?

4 thoughts on “EnergyStar for Cars

  1. I think your gas savings figures are a little misleading. For them to be meaningful, a hybrid needs to be compared to a comparably sized
    conventional automobile. The savings are not as dramatic when you figure in the extra initial cost of the hybrid.
    And let’s face it. Is a family of four going to chose the cramped quarters of a Prius when they can ride in a Sienna. I’ve never seen a soccer ball sticker on the back of a Prius.

  2. I agree that one could make a closer like-to-like comparison. But I’m thinking of the family in the dealership and the fact that they might actually choose a different car because of this information — not whether hybrid cars are more efficient because of their design (lightness, thin tires, etc) vs. the engines themselves.

    Even comparing a Prius to a Camry, over 5 years at 12,000 miles/year the Prius saves $5,000 in gas (at $4.50 a gallon).

    So my point is that at current gas prices, the hybrid engine could more than pay for itself, yet consumers aren’t given easy information that would let them see this.

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