BoA argues GM, Ford and Stellantis either face a future of funding continued losses in China or they can redeploy resources to finally become competitive with Tesla—but they can't do both.
why is this a surprise? The roads these cars drive on are also publicly funded. There is no “car market” without public money. The main problem in the US is that the government isn’t pushing automakers in a useful direction by allowing heavy, wasteful vehicles to be the most profitable.
They actually gave them a loophole doing the exact opposite, vehicles with a bigger footprint had less strict mpg requirements.
This was written in 2011:
CAFE standards create profit incentive for larger vehicles
The current Corporate Average Fuel Economy standards create a financial incentive for auto companies to make bigger vehicles that are allowed to meet lower targets, according to a new University of Michigan study.
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The loophole is the formula for setting mile-per-gallon targets. The standards, which actually depend on the sizes of vehicles automakers produce, are expected to require that firms boost average fuel economy to 35.5 mpg by 2016 and 54.5 mpg by 2025. Those oft-cited numbers are averages. In reality, each car company must meet a different standard each year determined by the literal “footprints” of the vehicles it makes. A vehicle’s footprint is its track width times its wheelbase.
According to the study, the sales-weighted average vehicle size in 2014 could increase by 1 to 16 square feet https://news.umich.edu/cafe-standards-create-profit-incentive-for-larger-vehicles/
why is this a surprise? The roads these cars drive on are also publicly funded. There is no “car market” without public money. The main problem in the US is that the government isn’t pushing automakers in a useful direction by allowing heavy, wasteful vehicles to be the most profitable.
They actually gave them a loophole doing the exact opposite, vehicles with a bigger footprint had less strict mpg requirements.
This was written in 2011: