Today's Gas-Guzzling Exotic Cars
May Get Zapped by New Fuel Rules

New CAFE Rules Mean a Ferrari 612 Scaglietti
Will Have to Meet Same Standard as a Camry
May 12, 2008
Eyes on the Road - WSJ.com

A Porsche 911 is a marvel of automotive engineering and an object of desire for people who've worked hard enough, and been lucky enough, to have $80,000 or more to drop on an exotic sports car. One thing a Porsche 911 doesn't do is get 41.3 miles per gallon in city and highway driving.



That could be a problem, because under the fuel-efficiency targets recently proposed by the federal government, Porsche cars sold in the 2015 model year (which begins in the fall of 2014) could be required to average 41.3 miles per gallon to avoid fines levied under the revised U.S. Corporate Average Fuel Economy (CAFE) rules.

Most of the discussion of federal efforts to boost the average fuel efficiency of new vehicles to 35 mpg by 2015 has focused on how the new standard will do in large sport-utility vehicles. But high-performance cars -- particularly those sold by relatively small manufacturers such as Porsche, Lotus, Ferrari and Subaru -- are also targets of the proposed reforms to the CAFE regime.

Overall, the new standards put a tougher burden on luxury and specialty manufacturers. By 2015, BMW AG, for example, is supposed to sell a fleet of cars that averages 37.7 mpg. Toyota, however, will have a fleet-wide passenger car target of 34.6 mpg, and General Motors Corp.'s car fleet will have to average 34.7 mpg.

If you have been griping that Uncle Sam seems to wants everyone to drive around in a midsized sedan with a small four-cylinder engine, you can now assure your friends and relatives that you're not paranoid.

The challenge to high-performance sports cars is a consequence of the government's move to regulate the fuel efficiency of cars and trucks according to "footprint," essentially the number of square feet a vehicle covers when parked in the driveway.

Consumers tend to distinguish cars and trucks by attributes such as body style, number of doors, resale value, brand image, engine displacement and functionality -- distinctions embedded in automotive marketing. A Toyota Camry and a Ferrari 612 Scaglietti are both categorized as "midsize cars" by the Environmental Protection Agency, but no one would seriously compare them.

But based on their footprints, the Camry and the Ferrari 612 are roughly in the same EPA class and by the middle of the next decade will be required to average more than 30 miles to the gallon. That might not be so tough on the Camry, but today's Ferrari 612 Scaglietti, with its 540 horsepower, 12-cylinder motor, is rated at just 9 miles in city driving, and 16 mpg on the highway.

The government's proposal plots footprints and mileage on a curve, with cars below 45 square feet in area required to average around 35 to 40 mpg by 2015, according to an analysis of the proposed CAFE rules by the Alliance of International Automobile Manufacturers. The mileage targets drop steeply for cars larger than 48 square feet. Light trucks have a much easier curve, with the maximum below 35 mpg for very small trucks, and roughly 25 mpg by 2015 for large trucks.

As far as the government is concerned, the Porsche 911 is a "minicompact car." As such, it should be capable of delivering about 40 mpg by the 2015 model year. Right now, the average for Porsche's fleet of sports cars is about 1 mpg under the current 27.5 mpg standard, and Porsche pays fines to the government to continue selling its cars here.

It's not just expensive sports cars that have a problem. My Subaru WRX is also in the crosshairs. The WRX, which has a turbocharged four-cylinder engine, is rated at just 18 mpg in the city, 25 on the highway, for a combined 20 mpg rating. By 2015, Subaru's fleet average will have to be 40.8 mpg under the rules. That means a lot fewer cars like my WRX.

"In choosing the footprint" as the basis for fuel-economy regulation, "smaller high performance cars get nailed," says Mike Stanton, president of the Alliance of International Automobile Manufacturers. "Maybe that's what they want to do."

Of course, nothing in Washington is over until it's over, and even then fights over regulation can drag on and on. The government hasn't made its CAFE proposals final, and is awaiting comments on its proposals. It will get plenty, including arguments that the law should allow an exemption for specialty cars made by low volume manufacturers such as Ferrari or Porsche.

Meanwhile, specialty car makers must weigh some difficult options. They can carry on offering the kinds of vehicles that have got them where they are today, and build the costs of fines into their pricing and profitability plans. They can try to re-engineer high performance cars to meet the standards -- which carries the risk that the resulting vehicles wouldn't be recognizable to their customers. One tactic could be to redesign cars so that they can qualify for the less stringent mileage targets offered to light trucks. (Porsche's already got a vehicle like this, the Cayenne, which has sold well but also outraged the sensibilities of some Porsche purists.)

They could seek shelter under the wings of larger, mass-market manufacturers, which sell lots of super-efficient cars to even out the fleet-wide averages, and perhaps cushion the costs of fines and high-tech fuel-economy fixes. (Porsche's expanding alliance with Volkswagen points in this direction.)

Tom Baloga, vice president of engineering for BMW's U.S. arm, says BMW has concluded it can meet the standards without compromising its image. But it won't be easy or cheap.

The way the government's proposed footprint/mileage curves work, a BMW 3-Series, at 45 square feet, will need to average 37 mpg. But a 5-Series, with a footprint four square feet larger, will be allowed to average 31 mpg. This steep curve puts a lot of pressure on high performance cars such as the M3.

Though it might appear tempting for BMW to simply make its future 3-Series cars as large as the current 5-Series, Mr. Baloga says that's not what BMW wants to do.

"We are going into this with the idea that we aren't going to compromise our ultimate driving machine characteristics. We are going to find a way to have the best of both worlds," Mr. Baloga says. That means, he says, more aggressive use of sophisticated engine technology, lighter weight materials, fuel-saving systems such as idle stop and further "electrification" of the car. BMW -- which has sold mainly six- or eight-cylinder cars in recent years -- will likely offer more four-cylinder engines, including diesels, going back to its roots as a high-performance, four-cylinder car company, he says.

"Everything will cost more," he says. "We have to do this more efficiently to keep costs from skyrocketing out of control."