EPA grants California CO2 emissions waiver

After a five-year legal battle, the Environmental Protection Agency yesterday granted California permission to set the nation’s first greenhouse-gas emissions standards for cars. This paves the way for as many as 15 other states that have endorsed California’s proposal to follow suit.

The state’s victory is mostly symbolic at this point, because it already agreed to follow new federal regulations through 2015. But it provides a final resolution to years of legal wrangling over CO2 limits on tailpipe emissions.

Since cars emit carbon dioxide in direct proportion to their fuel consumption, the issue had been mired in dozens of lawsuits and countersuits among automakers, the various states, the EPA, and non-profit environmental organizations over whether the rule was an emissions or a fuel economy regulation, whether it was practical, and who had the right to enforce it. This action ends the long saga.

Under the 1968 Clean Air Act, California is allowed to set its tougher emissions standards than the rest of the country, but it can’t set fuel economy standards. Other states are allowed to sign on to the California standard or the national standard, but only with the permission, or “waiver” from the EPA. So 15 other states, including Massachusetts, Vermont, Maine, Rhode Island, Connecticut, New Jersey, Pennsylvania, Washington, and Arizona, which had signed on to the California standard were waiting for the ruling.

In May, EPA administrator Lisa Jackson put the issue to rest by passing the first national carbon dioxide emissions standard for cars, modeled after the California standard. The national CO2 limits would effectively require cars to average 35.5 mpg by 2015. In return, California agreed not to pass its own rules until after 2015.

This new ruling will allow California to again take the environmental lead after 2016.

The state’s original standards, which started the flurry of lawsuits, calls for CO2 limits that would require cars to average almost 40 mpg by 2020.

—Eric Evarts

Green carmakers may emerge as next U.S. car industry

Oil tycoon T. Boone Pickens is investing in a new car factory in Louisiana. The San-Diego-based company, V-vehicles, is keeping tight wraps on what type of car will be produced there, but Pickens said in a statement that it will be an “environmentally friendly” vehicle that will run on gasoline and eventually may offer a natural gas option. (In related news, the Potential Gas Committee on Thursday upped its estimate of available natural gas reserves in the United States by about 34 percent, due to improved recovery technology.)

This got me thinking about all the new start-up car companies popping up around the United States, as the traditional Detroit automakers (and even big imports with U.S. plants) are faltering.

Several we have written about here before include:

Tesla Motors – founded by PayPal billionaire Elon Musk, and based in Palo Alto, Calif., Tesla builds a $100,000 electric sports car, the Roadster, and has plans to build a seven-passenger electric sedan, the Model S. The company is seeking more than $350 million in funding from the Department of Energy to buy an existing factory to build the Model S.

Fisker Automotive – based in Irvine, Calif., is developing a plug-in hybrid (range-extended) electric luxury sedan called the Karma. Run by former BMW and Aston Martin designer Henrik Fisker, who designed the car, the company has outsourced everything from manufacturing to engineering. The Karma will be built in Finland.

Carbon Motors – Based in Hermosa Beach, Calif., former law-enforcement officers and automaker executives are leading the company to offer a new, purpose-built police cruiser. So far the company is still working on developing a legal framework for the car, although it has shown a prototype. It says the car will be made in the U.S.

Zap – This long-time electric bicycle-maker based in Santa Rosa, Calif., has branched out into making small electric cars, including the Zebra 3-wheeled coupe and pickup.

Aptera – Run by a group of former auto industry executives, based in Vista, Calif., is developing a three-wheeled electric two-seater that it says will be built in California later this year, and initially only sold in the state.

Bright Automotive – based on a spinoff from the Rocky Mountain Institute think tank, Anderson, Indiana-based Bright plans to market a small(ish) electric delivery van, called the Idea, in 2011.

Myers Motors – born out of the defunct Corbin Motors, Myers, based in Tallmadge, Ohio, bought the fiberglass tooling and design of the Corbin Sparrow, which it sells as the Myers NMG, for No More Gas.

EV Innovations – Based in Las Vegas, EV Innovations has been converting cars to electric power for years, and it is now developing two of its own vehicles: the two-seat Wave and the Inizio sports car. Both are supposed to be ready by the time the competition begins for the Automotive X Prize later this year.

Admittedly, this is only a partial list. Other companies, are launching new motorcycles in the U.S., including Zero Motorcycles, and Brammo, which will be sold through Best Buy stores. The XPrize alone has attracted dozens of competitors developing plans to build fuel-efficient alternative cars in the U.S. And an industry has developed to build low-speed neighborhood electric vehicles such as the G.E.M. car around the country.

Just like the dawn of the 20th century, which saw a proliferation of horseless carriage builder, most of these modern startups may not last. But one or two, or one that follows behind them, may eventually thrive. So as Chrysler and General Motors shrink and become dependent on government support, it is encouraging to see American ingenuity springing in to fill the void.

--Eric Evarts

Cash for clunkers bill cuts fuel consumption–running the numbers

Environmentalists and even some Democratic U.S. Senators have criticized the cash for clunkers legislation that President Obama is expected to sign as “Handouts for Hummers.”
 
They say the bill doesn’t set high enough fuel economy targets especially for SUVs. Cars have to get at least 22 mpg and 4 mpg better than the vehicles traded in, to be eligible for a $3,500 voucher. Light trucks and SUVs only have to get 18 mpg and 2 mpg better than the vehicle traded in to be scrapped. Full-sized SUVs only have to get 15 mpg, or an improvement of 1 mpg.

While those improved numbers may not sound like a lot, small mpg improvements can mean significant savings at the pump. Small mileage improvements to very inefficient cars yield bigger savings than similar mileage improvements to more efficient cars. To illustrate the point, the chart below lists five potential trades that would earn vouchers under the Cash for Clunkers program, and the amount of fuel and cash each would save. (We assume the cars are driven the national average of 12,000 miles per year. Mpg ratings are EPA-sourced combined averages, as the law specifies. And gasoline is $2.70 a gallon.)

We list five trade-ins from our “clunkers to junk” list and five Consumer Reports recommend cars that could replace them. Four of the cars get 5 mpg better than the car they are replacing; one gets 10 mpg better. The three light-trucks that achieve a 5 mpg improvement will get vouchers worth $4,500, while the car will get only a $3,500 voucher. The car trade that nets a 10 mpg improvement would earn a $4,500 voucher.

As the chart illustrates, if you own the new car for five years, the gas savings over the clunker can nearly double the dollars in your pocket when you add it to the amount of your voucher.

Trade-in	mpg	Purchase	mpg	Gallons saved per year	Money saved per year	Voucher
1993 Dodge Ram (4wd)	12	Chevrolet Silverado (V6, 2wd)	17	294	$794.12	$4,500
1998 Nissan Pathfinder (4wd)	15	Nissan Murano (AWD)	20	200	$540.00	$4,500
1996 Chevrolet  Astro	16	Ford Escape (4-cyl., AWD)	21	179	$482.14	$4,500
1998 Olds Aurora	18	Volvo C30	23	145	$391.30	$3,500
1998 Mercury Grand Marquis	18	Hyundai Elantra	28	238	$642.86	$4,500

—Eric Evarts

Update: President Obama signs Cash for Clunkers bill.

2010 GM model year changes boost fuel economy and safety

General Motors has released details of its model lineup for 2010. As might be expected from a company in bankruptcy, the number of model launches is modest, though significant. There are six new vehicles: the Buick LaCrosse, Cadillac SRX and CTS SportWagon, Chevrolet Camaro and Equinox, and the GMC Terrain, plus a special-edition Corvette, the Grand Sport.

But the bigger news may be what isn’t included in the plan; GM won’t be building the mild-hybrid versions of the Chevrolet Malibu, Saturn Aura or Saturn Vue, according to an AutoBlog report. (Since the company has announced it is selling Saturn, eliminating Saturn hybrids is not surprising.)

GM spokesman Brian Corbett confirms, “Production of 2010 model year Malibu hybrids is suspended due to high inventories of ’09 models for the remainder of the calendar year.” After that he says, the company will reassess whether to continue building Malibu hybrids. Production of the Saturn hybrids is also suspended for now pending final arrangements with Penske Automotive Group, the company buying Saturn.

Since GM is phasing out Pontiac, the laudable G8 sedan is also history (along with a number of other Pontiac models we won’t miss). The lone Pontiac listed for 2010 is the CR-recommended Toyota Matrix twin Vibe.

Beyond the new models, General Motors has new technology coming to improve fuel economy, including:

• Adding cylinder cutoff technology to the 6.2-liter V8 engine used in the Cadillac Escalade.
• Adding variable valve timing all 5.3-liter V8 and 6.2 liter V8s. (Flex-fuel capability will also be expanded to almost all the company’s V8s.)
• Making a single-speed transfer case standard on Tahoe, Yukon, Avalanche, and Suburban SUVs which means they become full-time four wheel drive. (A two-speed transfer case will still be optional.)
• Expanding the range of special XFE fuel economy trim lines to its large and small pickups.

Safety technology will also be expanded, with side and side-curtain airbags standard on Chevrolet Colorado and GMC Canyon pickups, a rearview camera available on the Chevy HHR, and lane departure warnings and blind zone alerts available on the Cadillac DTS.

USB ports for connecting portable music players will become more commonplace, as will XM Traffic alerts and advanced OnStar 8.2.

We hope these new technologies will help GM vehicles become more competitive. And, of course, we will test the new models as soon as they are available. In fact, we already bought a Camaro.

—Eric Evarts

Toyota: Electrics coming, but won’t replace gas cars

Electric cars are no replacement for conventional cars, despite what you might have read.

That’s the conclusion of Bill Reinert, Toyota’s manager of advanced technology planning. In an interview at a New York City conference on sustainable development, Reinert said the company would produce an electric version of it’s tiny Scion iQ. He added that the company is looking at new business models for electric cars, and it won’t be focused on suburban use.

Electric cars may make the most sense to operate in the city, where vehicles usually drive at low speeds and for short distances. However, a real challenge for city use is that most urban dwellings don’t have dedicated parking with access to a plug. So plug-in cars that work on the expectation that consumers will charge them every night at home won’t work.

So, Toyota says it is looking at “new business models,” such as car sharing, leasing batteries or cars, and fleet sales for its EVs. Some will be sold to traditional consumers as well, he says.

Toyota announced that it will put 500 plug-in Priuses on the street in a fleet demonstration program in 2009, with 200 examples in Japan, 150 in Europe, and 150 in the United States. Powered by lithium-ion batteries along with a gasoline engine, these initial plug-in vehicles will be for fleet use, with no opportunity for sale to customers.

In the end, Toyota predicts that perhaps 20 percent of vehicles will be electric by 2020.

—Eric Evarts

Updated 6/12/09

Fuel-efficient tire regulations and rolling-resistance ratings

The California Energy Commission (CEC) has moved another step closer to introducing a draft proposal for rating tires for fuel efficiency.

The State of California may well lead the nation, introducing a draft proposal for rating tires for fuel efficiency. The proposal will be the topic of discussion in a June 10 workshop presented by the CEC. (We know the federal government is also working toward a proposal but that is not expected out before the end of the year.) The California Energy Commission has been working diligently on a proposal through the Assembly Bill (AB) 844 Statutes of 2003. To this end, the CEC’s own research, and deliberations with tire manufacturers and retailers, and interested parties have formed the basis of the draft proposal.

Consumer Reports Auto Test Center was asked to be part of the proposal process as we are the only independent group that rates tires for both performance and rolling resistance.

Highlights.

• The ratings process will cover all passenger (P) and light truck (LT) tires available for sale in California, excluding winter tires; space-saver and temporary spare tires; tires with wheel sizes of 12-inches or smaller; motorcycle tires; and tires manufactured for use on off-road-use-only vehicles.
• There will be a rating system for each tire size designation and load index (load capacity). Tires will be ranked by lowest to highest rolling resistance (most to least efficient tires). Those rated as a “Fuel Efficient Tire” will have a rolling resistance force within 15-percent of the lowest rolling resistance tire for that specific size designation and load index.
• Tire manufacturers will be required to submit rolling-resistance data on every tire size within every model line sold in the state. Data will be reported by product SKU (Stock Keeping Unit), a unique number identifying a manufacturer’s tire model, size, and specific features. 
• The determination of a tire’s rolling resistance is measured using ISO 28580 rolling-resistance test protocol or produced by calculation (i.e. numerical modeling).
• Manufacturers must submit information on effected tires by July 1, 2011.  New tires will require submission of data prior to being sold in California.

What’s it mean to consumers?
Aside from Consumer Reports’ own tire rolling-resistance ratings, there are few other avenues open to consumers for information on this subject right now. The CEC proposal will be much more comprehensive, essentially covering most tires sold for light-duty vehicles and since what is sold in California is sold elsewhere around the nation, the availability of the data should have broad appeal.

The negative impact could be the misunderstanding tire rolling resistance and the compromises that come with some tires that have very low rolling resistance. In general, consumers should understand that as a rule, a 10-percent reduction of rolling resistance can improve vehicle fuel economy by only one to two percent. But typically consumers purchasing low rolling resistance tires should not expect a huge windfall savings in fuel costs. Also, some tires trade-off key performance features like tread-life and wet-grip for low rolling resistance.

The CEC is mindful of the trade-offs some tire manufacturers make for achieving low rolling resistance vs. traction and tread-life,  but technology is at the crossroads where some tire manufacturers are closing-in on breaking down those compromises. The CEC believes the tire efficiency rating system will encourage a competitive atmosphere for tire manufacturers to achieve the coveted “Fuel Efficient Tire” rating. Consumer Reports has already been asked to participate in this next phase, as well.

Consumer education will be an important part of the Tire Efficiency Program. The CEC understands the success of the program is in educating the consumer on what tire rolling resistance is, expected fuel savings, and possible trade-offs associated with low rolling resistance tires. The CEC’s plan is to make public access to the entire database for consumers interested in the researching tires which will include rolling resistance and tire sidewall data.

Bottom line:
Rolling resistance should not be the primary reason for a tire purchase. The most important considerations are safety-related performance features including dry- and wet-braking, hydroplaning resistance, handling, winter traction if applicable in your region, and tread-life. Low rolling resistance should be a secondary consideration in your tire-buying decision.   

The CEC would like to know your interest in the Fuel Efficient Tire Program and you can make comments here or in TireTalk (an expert forum available to online subscribers).  

Before buying, be sure to consult our car, truck, and winter tire ratings and buying advice.

—Gene Petersen

Behind the wheel: Mini E

We recently had a chance to drive the all-electric Mini E at a local press event. The car is not for sale yet, but in what amounts to an extended market test, a selected group of customers in the Los Angeles and New York City areas will pay $850 per month to lease one for a year. (See our Mini E preview.)

The Mini E is a two-seater with a large, 35-kwh lithium-ion battery pack occupying the space where the back seats would be. The electric motor running off that battery produces the equivalent of 204 hp and 162 lb.-ft of torque. To put that in perspective, a gasoline-powered Mini Cooper S produces 172 hp and 177 lb.-ft. So this electric Mini has oodles of power. The claimed range of the E is 150 miles. A full recharge is said to take about four and a half hours if you have access to a 240-volt power source, but almost 24 hours if you have to use standard 110-volt power. (See our Mini Cooper ratings and reviews, available to online subscribers.)

We took turns driving the electric Mini around a hilly, curving, five-mile loop in Bear Mountain State Park, along the Hudson River north of New York City. Driving it was a hoot. With the electric powertrain’s instant torque, it’s easy to light up the front wheels at launch or even while accelerating out of corners. The motor pulls strongly, eagerly, quietly, and effortlessly. Power delivery to the wheels is similar to a Cooper S—right down to the torque steer. Handling is similar, too, with go-kart like agility. The regenerative braking system, which recaptures braking energy to recharge the battery, lets you descend hills without touching the brakes. It’s a pretty aggressive system that we think a lot of people will find strange at first. The only noise from the powertrain is a muted electric whine. That’s too bad in a way, since the regular Mini’s exhaust note is quite exhilarating.

Similar in appearance to its gasoline-fueled brethren, the Mini E adapts subtly to the electric format. For instance, the instrument cluster does away with a tachometer, substituting a gauge that shows the state of the battery’s charge. Open the fuel flap and you find an electric receptacle instead of a gas cap. One thing that can’t be hidden is the lack of luggage space. Behind the battery is room for a carry-on bag, but not much else.

After a group of heavy-footed journalists had taken turns pushing the Mini E hard around the park’s hilly terrain for a few hours, it became clear that the car wasn’t going to achieve anything close to its 150-mile range in these extreme usage conditions. The point was freely conceded by the BMW/Mini representatives on hand, and it came as a surprise to no one.

The Mini E may still need some work, such as less intrusive regenerative braking, but it proves that green and fun-to-drive are not mutually exclusive. It also shows both the advances in battery technology and the need for those batteries to get a lot smaller. At this point, electric mobility still demands tradeoffs: You can get high performance, good range, and adequate interior space. But you get to pick only two.

—Gabe Shenhar

Learn about driving green in the Consumer Reports special fuel economy section.

Consumer Federation says new mpg rules will be cost effective

“Ending our dependence on fossil fuels is the most difficult challenge we have ever faced,” said President Obama yesterday, announcing new national standards for carbon dioxide emissions that will raise fuel economy requirements to 35.5 mpg, combined average for cars and trucks, by 2016. “We have known about the costs of this oil dependence since the gas shortages of the 1970s, and all too little has been done.”

Now the administration has brought together a coalition of automakers, environmentalists, state governors, autoworkers, and federal agencies to sign on to the new agreement.

The new standards, however, are expected to raise prices by $1,300 per car by 2016, according to an analysis by the Obama administration.

That seems like a lot to ask of consumers in such a deep recession. But a new analysis by the Consumer Federation of America (CFA) shows that the proposal will actually save the average new-car buyer $500 a year in fuel costs (read pdf), assuming gas prices return to $3 a gallon. Overall, the savings could amount to $2,500 over the lifetime of the car.

At that rate, they say it would take less than three years for consumers to break even, even with the extra up-front cost of the cars. If gas went to $4 a gallon, consumers would save $650 a year.

The Administration also estimates that the new standards will save 1.8 billion barrels of oil over the lifetime of the cars produced in those years, equivalent to the amount of oil the U.S. imports annually from Saudi Arabia, Venezuela, Libya, and Nigeria combined.

The agreement promises to reduce greenhouse gas emissions by nine million metric tons a year. While the fuel economy standards are slightly lower than those proposed under a California bill that was awaiting federal approval, the potential CO2 savings are far greater because the standard is applied to all cars nationwide.

Ten automakers signed on to the agreement, and the executives of those companies stood behind the President as he made the announcement today at a Rose Garden ceremony.

The President wryly noted that, “It’s no secret that these are folks who have occasionally been at odds for decades, and embroiled in lawsuits against one another.” Now, he said, “What everyone believes is that status quo is unacceptable.”

On the agreement, Senior Director of the Consumer Reports Auto Test Center David Champion said, "The U.S. is taking a major step forward in producing greener, more fuel-efficient vehicles. This decision provides a clear path for a national standard after years of uncertainty, which is a relief for the auto industry and consumers alike. These standards strike a good balance between fuel economy and maintaining safe cars. In the long run, the fuel savings should help offset the higher costs of building greener vehicles. This is a good step for consumers' pocketbooks, auto safety groups, and the environment."

To learn more, read "EPA introduces first CO2 limits for cars."

—Eric Evarts

Learn about driving green in the Consumer Reports special fuel economy section.

Why gas prices are going up

Last summer, we saw record high gas prices that sent many consumers trading in their gas guzzlers to buy hybrids and some choosing to ride motorcycles and scooters. Then in the fall, prices went back to more wallet-friendly levels (below $2) and our minds shifted to other issues such as the recession, housing crisis, government bailout of Chrysler and GM, dealer closures, and a variety of economic stimulus packages including the Cash for Clunkers bill. Now, as we head into the Memorial Day holiday this weekend, gas prices are back in the headlines. While prices aren’t expected to jump anywhere near the record levels of last summer, they have been quietly inching up.

The Energy Information Administration (EIA) predicts gas prices to average $2.21 this summer--$1.60 less than last year. Crude oil is projected to be $53 a barrel, down from the average $100 a barrel in 2008. However, since the beginning of May, gas prices have been creeping up with the largest increase last week when prices rose 16 cents from the week prior to $2.24.

Due to the economy, petroleum demand has been weak and that has kept prices low and has forced refineries to cut their inventory. But new signs are showing that we are nearing the end of the recession and consumer confidence is growing. Low gas prices generated a rebound in demand during February and March. A Reuters/University of Michigan survey found that consumer confidence rose in May above economists’ expectations. So, we are at a time where demand is increasing while oil supply is low.

What about diesel?

Historically diesel prices have been less than gasoline, but since September 2004, the price of diesel has been generally higher primarily due to strong worldwide demand. However, last week marked a turning point when the average diesel price fell below that of regular fuel. Key factors for this shift are that diesel fuel consumption is declining in the U.S., plus there is a worldwide decrease in usage as well as output. The demand weakness combined with a recovery in gasoline consumption has caused a shift in price.

The lower diesel price isn’t expected to stay as diesel is projected to average $2.27 a gallon this summer—six cents higher than gasoline. For 2009 the average gas price is expected to be $2.17 and 2010 forecasts jump to $2.42 a gallon. Diesel is expected to average $2.30 for 2009 and $2.69 in 2010 according to the EIA.

What does this all mean for consumers?

If all predictions are correct, we will be seeing an increase in fuel costs this summer as demand increases, but the $4.00 a gallon isn’t expected to return anytime soon. Hopefully that will be enough to help stimulate the economy by encouraging consumers to start spending and hitting the roads again this summer.

For more information on gas prices, alternative fuels, and saving fuel, see our guide to fuel economy.

—Liza Barth 

EPA introduces first CO2 limits for cars

The Obama administration has announced the first-ever greenhouse-gas emissions limits for cars. The limits, a joint rule by the Environmental Protection Agency (EPA) and the Department of Transportation (DOT), will require cars to average 35.5 mpg by 2016, four years earlier than under previous fuel economy requirements.

The new rule ends years of legal battles between automakers, the federal government, and California. The Golden State had been trying to implement its own greenhouse-gas emissions rules, which would have required cars to get 37.5 mpg by 2020. Automakers and California have agreed to the standard and the state has agreed not to implement its own, more stringent standards before 2016, according to a senior Obama administration official.

“We look forward to getting the waiver we’ve asked for that will allow us to get our program for 2009, ’10, and ’11," said Stanley Young, a spokesperson for the California Air Resources Board. "For 2012 through 2016, we have agreed to accept the federal standard as equivalent to the California standard. The early years for our program have a very gentle ramp in, so most if not all the models currently for sale in California meet the standards for the first year, that is, 2009.”

Limiting greenhouse gas emissions, primarily carbon dioxide, effectively requires cars to get better fuel economy. CO2 is a natural byproduct of burning fossil fuels, and there is no technology to filter it out or chemically treat it.

The new standards will essentially require cars to get 39 mpg in 2016, and SUVs, pickups, and minivans to get 30 mpg.

The federal government has raised fuel economy standards for the 2011 to 2015 time frame twice in the past two years, but neither requirement has been implemented.

The new standards will raise fuel economy even faster than either of those two earlier provisions. Individual automakers will still have individual fuel economy targets, as will certain sizes of vehicles. Like the previous regulations, the new standards are based on the size of the vehicle’s footprint in an effort to force automakers to apply fuel-saving technologies to all their models. (The footprint is the area between the wheels of the car.) Several automakers have told us they couldn’t meet the last increase in fuel economy standards without introducing large numbers of electric cars. We expect these CO2 limits will only accelerate electric-car introductions.

—Eric Evarts

Learn about driving green in the Consumer Reports special fuel economy section.

Updated 5/19/09.