NADA chairman warns 60 mpg by 2025 could have adverse effect
During a speech on Thursday, Ed Tonkin, National Automobile Dealer Association president, warned against the EPA's push for increased fuel economy standards.
During a speech to the Automotive Press Association, delivered by National Automobile Dealer Association (NADA) chairman Ed Tonkin, the topic of future fuel economy standards was discussed in great detail. Tonkin used his speech, titled, "The Consumer Always Prevails" not to make one-sided arguments, but to raise questions about the validity of future standards.
Setting the tone for his speech, Tonkin opened by telling of how he was recently asked who the most important person was in the auto industry. Tonkin answered, "It's not Ackerson or Mulally or Lents. It's not Obama. And it's certainly not me. It's the consumer. Nothing happens without a buyer."
Tonkin's point would become the backbone of his speech, aimed at arguing the fact that he believes pushing fuel economy standards too high, too soon could result in what he referred to as the "jalopy effect," where owners are essentially forced to hold onto older vehicles longer as the cost to purchase a new vehicle is pushed out of reach due to increasingly demanding fuel economy and emissions standards.
Tonkin argues that if such a situation occurs, the net result will be an increased amount of pollution to the environment as fewer and fewer people are able to purchase the newest and cleanest burning vehicles, forced instead to drive older, higher polluting vehicles several years longer.
The example is in the bag
Tonkin presented an example during his speech that very recently played out at Frito Lay, the massive corporation that makes chips, including the brand SunChips. Chairman Tonkin explained how SunChips switched to a 100 percent biodegradable chip bag about a year ago, only to find that sales tanked as consumers voiced their disdain for the incredibly loud bags.
Things got so extreme that disgruntled chip lovers created a Facebook group called, "Sorry, but I can't hear you over this SunChips bag." Tonkin then explained that this was a prime example of going too far, too soon in the name of environmental change. Consumers want products that are more environmentally friendly, but they will only go so far at a time, Tonkin argued.
Frito Lay has since announced it will be switching bag to the old bag style, millions of wasted dollars in lost sales later. Tonkin argued the lesson learned was, "It's good to be environmentally conscious, but don't get ahead of the consumer. Make sure you know what the consumer really wants before you make big changes to your
Tonkin also reminded the audience that it was the federally mandated CAFE standards in the 1980's that nearly put the wagon into extinction - only to be replaced by less fuel-efficient, but CAFE-immune SUVs, another blunder.
The chairman's final point regarding the suggestion that the government push may be "too much, too soon," was the topic of government subsidies with electric vehicles. Tonkin gave the example of the new Nissan Leaf, eligible for a $7,500 federal tax credit, as much as $2,500 on the state level and a subsidized $3,000 home-charging unit from the Energy Department.
Tonkin points out that all of the government subsidies are nothing more than proof that the buying public is not ready to pay the necessary premiums required by automakers to meet the increasingly stringent fuel economy and emissions standards. Tonkin warns that if overly aggressive, fuel economy regulations will "price Americans right out of the market."