Mexico's proposed fuel-economy standards: Short interview with John German

I spoke recently with ICCT senior fellow John German about the opportunities posed by harmonization of fuel economy standards throughout North America. It’s a short “interview,” about six minutes, and the audio is available through our new podcast at cleantransportationpodcast.org (you can download the .mp3 file here, or subscribe to the podcast here or — if you’re using iTunes — here).

John makes the point that as a result of computer-aided design, computer simulation, and on-board computer controls, the rate of technology development to improve efficiency is accelerating rapidly. And new technologies are being incorporated much more quickly into the fleet as well. In the U.S. market, 6-speed automatic transmissions have doubled in the last two years (from 25% to 52% of new vehicles sold) and turbochargers have doubled in one year (from 3.5% to 7.4%). Both of these technologies make a lot of sense in the Mexican market—at the same time as they allow automakers to improve efficiency, they also reduce power losses at high altitude and improve the gearing for steep grades. As a result of all these types of technologies and more, Ford is now selling in Europe an EcoBoost version of their popular Focus that increases the efficiency from 14.6 km/L to 21.4 km/L, a 47% leap between the 2010 and 2012 model years. This proposal will help ensure that models such as these are brought to Mexico as well.

John mentions 200 million pesos (US$15 million) in investment by the U.S. agencies—EPA and NHTSA—to understand the costs and efficiency potential of these new technologies. As a result of vehicle simulation studies by Ricardo, teardown engineering cost assessments (literally tearing a new technology to pieces and adding up the cost of every nut and bolt) by FEV, and weight reduction assessments by Lotus Engineering and FEV, U.S. regulators found that costs were dropping quickly enough and the technology potential was improving to such a point that they could double the efficiency expectations for approximately the same level of costs. This allowed EPA and NHTSA to propose, with support of all the major automakers, a 20.9 km/L standard in the U.S. for the year 2025. That standard, which is expected to be finalized this summer, will double fuel efficiency from current levels in the U.S. 

Automakers in Mexico have been far less supportive of Mexico’s far less ambitious proposal. They raise concerns about altitude, fuel sulfur, and the need for credits and incentives. John addresses these concerns in this interview, laying each to rest.