Daily Ticker

Obama’s CAFE Standards “Not a Good Thing for Anybody,” Edmunds.com CEO Tells Congress

Aaron Task
Daily Ticker

On Wednesday, the House Subcommittee on Regulatory Affairs held a hearing entitled Running on Empty: How the Obama Administration's Green Energy Gamble Will Impact Small Business & Consumers.

With that name, the hearing was designed to be political. But it also dealt with "something very important" according to Edmunds.com CEO Jeremy Anwyl, who testified about that important matter: the Corporate Average Fuel Economy (CAFE) standards proposed by the Obama administration.

Back in July, President Obama announced new CAFE standards of 54.4 miles per gallon (MPG) by 2025, which followed his 2009 mandate of an average 35.5 MPG by 2016.

In addition to the challenge of forecasting for the rest of 2011, much less out to 2025, Anwyl opposes the CAFE standards. As detailed on Edmunds.com's web site, his message to Congress was:

  • To date, consumers have been either ignored or misrepresented
  • Consumers matter.
  • Consumers are definitely not on board.

"The big problem with CAFE is it potentially puts consumers and the car companies at odds," he says in the accompanying video. "If the government says to the car companies 'you've got to built these vehicles' and yet in the marketplace consumers are just not that interested, that's not a good thing for anybody."

Despite polls showing consumers want high fuel-efficiency vehicles, Anwyl notes that consumer behavior tells a very different story. Presently, hybrids represent only about 2% of U.S. car sales vs. over 30% for SUVs, Edmunds reports.

"You can't trust polls you have to look at what people do," Anwyl says. "Apparently this was a radical thought" to some members of the House panel.

"Proponents [of CAFE] say consumers really want this: if that's the case why do you need to regulate something?" he adds. "This is still a free market economy. If consumers want something and it's cheap to provide it to them and the technology is available, it's going to happen."

Aaron Task is the host of The Daily Ticker. You can follow him on Twitter at @atask or email him at altask@yahoo.com

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