Reader Question: The About Face?

Here’s the latest reader question, along with my reply!

Mike asks: Hello Eric – I really enjoy all of your articles and thank you for writing them.  I note that the automakers recently did an about face from initially opposing Obama’s accelerated MPG standards to now supporting them. What is your take as to why the auto makers have changed their position? My initial take is that it creates a fairly strong barrier to entry to the market but I do not view the auto makers under threat from new entrants to the market.

My reply: I’ve written a couple of articles about this, but the gist is that the industry seems to have decided it’s less trouble to go along with and even anticipate these mandates rather than to fight them. The bottom line is they can simply offload the compliance costs onto us. And they can offload the regulatory burden – with regard to emissions particularly – onto another industry… the power generation industry.

An electric car is considered “zero emissions” at the tailpipe, so it’s exempted from having to pass federal emissions certification tests, an arduous and expensive process. Of course, the utilities that make the electricity which powers EVs will be the new focus of attention, as almost all of them are coal/oil/natural gas-fired and so “emit” carbon dioxide. But that won’t be the car industry’s problem anymore.

And I think you’re right about regulatory capture being a factor as well. But at the end of the day, offloading the cost and hassle of “emissions” regs – and their worry that even if the Orange Man does temporarily dial back the MPG standards, they will rise again under a different president – are the main reasons for the industry giving the regulatory apparat a bear hug and a tongue kiss.

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Got a question about cars, Libertarian politics – or anything else? Click on the “ask Eric” link and send ’em in!

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