Car companies are starting to make cars that are both efficient and exciting
Any major transition disrupts everyone involved. A marriage or divorce, moving to a new home, changing jobs—it always takes a while to find your footing and start operating at your prior level.
The same is true of almost anything. Plants don’t go from winter to spring instantly; birds don’t hatch ready to fly and car companies can take a long, long time adapt to new rules. And while they’re doing so, the results can be ugly.
It happened twice in the early ’70s, more or less at the same time. New emissions standards absolutely killed performance (if you ever hear an engine called “smog-choked,” it’s because it had lower compression and restrictive exhaust recirculation systems that reduced power to produce lower emissions).
At the same time, manufacturers responded to proposed new safety standards with the tragic “collonade coupes,” and at least temporarily, the death of the convertible.
Cars take a long, long time and billions of dollars to get to production, so if there’s a change in either consumer demand or regulations, whether real or anticipated, there will be stopgaps.
Cars from five years ago like the Toyota Prius or old Honda Civic hybrid were stopgaps. They fulfilled fuel economy rules and a desire for high-efficiency cars when gas was heading towards $4/gallon, but they were neither fun nor really very nice. If you love cars, it was a desperate-feeling time, the end of an era like 1971. They were the collonade coupes of the era.
Just as it was 45 years ago, building an almost entirely new class of vehicle requires a new engineering program, new production lines, new suppliers, new materials and who knows what else. It took a long time for those programs to develop cars that are both as appealing as those made before the EPA got more serious about fuel economy. Which is why now, when gas is a nickel, Ford is getting over 600 horsepower from a 3.5-liter EcoBoost V-6 when they might as well be making cars out of lead.
In the short term, this isn’t going to work out very well for Ford, Acura, Porsche, BMW or anyone else who’s building a new generation of ultra-high performance, high-efficiency engines.
Full-size SUV and luxury sales were up massively in 2014, especially towards the end of the year. I worked with a woman who owned a Toyota Sequoia, which has a 26-gallon tank. I remember filling up at the same time she did and watching as she hit the pump’s $50 limit twice before she was full. That same tank of gas would be about $45 today and her 15 mpg—or the same in a Dodge Ram or 5.0-liter Ford F150 or Nissan Armada—is not a problem in the showroom.
Fortunately, sort of, we’re just about bottoming out on gas prices. The oil industry is always a boom-and-bust cycle and also suffers from the same problems with transitions as everything else. When oil is $100 a barrel, you can make a whole lot of money drilling oil shale in North Dakota, and that ends up as a whole lot of gas.
Oil was $45-$49 a barrel when I wrote this and American oil shale producers started to hit their break-even point at around $80. Somewhere in the not too distant future, maybe as soon as this summer, America’s oil boom towns are going to start drying up and our oil will once again come from people with whom America would really rather not do business.
I like getting change from a $20 bill at the gas station as much as anyone, but if you have any interest in having great cars to drive in five years, you should be hoping that low gas prices are a blip. There is a product pipeline full of amazing high-performance, fuel-efficient vehicles, and they are very complicated, hi-tech machines.
If there’s a cheaper alternative, like a big gas engine that offers the same performance but takes a hit in efficiency, that’s the one both manufacturers and buyers will want. The high-efficiency manufacturing machinery has taken years to turn on, but it can be turned off much faster, if there’s money to be made.