Gas Mileage: Which car manufacturer was fined over $260 million?
Since the late 70s we’ve had mandated fuel economy standards in North America. In America, these are called the Corporate Average Fuel Economy (CAFE) standards and they are intended to bring better gas mileage (higher mpg) vehicles to market.
Originally CAFE was a response to the crisis caused by the 1973 Oil Embargo. Some readers may remember the odd-even gas rationing system during the crisis. The original motivation was purely energy independence. Over the years, the motivation for better gas mileage has grown to include economic, environmental, and geo-political ingredients. More bluntly, higher gas mileage:
- keeps more dollars in your pocket,
- puts less emissions into the air,
- and sends less dollars overseas.
A few car manufacturers continually miss the standard. Here we list the top 5 car manufacturers that have been missing the standard, and how much it cost them.
Big changes to CAFE started to take effect last year, and these changes will result in vehicles achieving much higher mpg ratings in the upcoming years. A simplified curve of the 2012-2016 standards and proposed 2017-2025 standards are shown. I’ll talk about what these changes mean for the average North American in another post. For now, lets take a quick look at who’s not made the old standards.
What happens when a car manufacturer doesn’t meet the mpg standard?
They get fined. I’ll cover the way the fine is calculated in detail another time. The short answer is that the fine rate is $55 for each mpg that is missed multiplied by each vehicle sold.
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The fine information is publically available – kind of. The agency that regulates CAFE has a summary of fines here. You notice though that the data only goes to 2004. Doing some more digging I was able to harvest the data up to 2008.
Crunching the numbers and summing over the years, I come up with the following totals.
Gas Mileage: Top 5 most-fined car manufacturers
5. DaimlerChrysler at $55 million.
I’ve always loved the Jeep YJ’s iconic look. Unfortunately it was as close to an aerodynamic brick as you can get.
4. Volvo at $56 million.
Volvo means “I roll” in Latin. They didn’t say how easily they roll.
3. Porsche at $62 million.
In a way, this is impressive. Since the fine is based on the total vehicles sold this lower volume car manufacturer must have missed the mpg marks by quite a bit.
2. BMW at $231 million.
The “Ultimate Driving Machine” has not historically included good gas mileage. With the focus on EfficientDynamics, it is clear that Ultimate Driving Machine of the future includes high efficiency.
And, taking the top spot:
1. Mercedes-Benz at $262 million.
And this doesn’t include the $30+ million fine in 2009 (again, my numbers only went up to 2008). Similar to BMW, the car manufacturer is clearly increasing the importance on fuel economy. With the roll out of the BlueTEC clean diesels and other technologies in the BlueEFFICIENCY portfolio, the German car manufacturer is greening (or blue-ing) its offering.
So what’s next
As you saw above, last year marked the start of the biggest increase in fuel economy standards in history. Since the fines are based on how far off the target a car manufacturer is, manufacturers that don’t increase the mpg ratings of their cars and trucks will be getting larger and larger fines. So you can expect to see higher fuel economy cars hitting the show rooms – from all manufacturers. And that’s a good thing for the your wallet, and for energy independence.
Agree? Don’t Agree? I’d love to hear your comments. One barrel at a time, Matt.