(2023-04-21) The Loophole That Made Cars In America So Big

The Loophole That Made Cars in America So Big. Few trends have been worse for the environment than the dramatic growth of the SUV market in recent decades.

the dominance of SUVs on American roads is a relatively new phenomenon. In 1980, SUVs made up less than 2% of new car production in America; last year, that number was closer to 50%.

In 1975, Congress passed a law that forced automakers to double the average fuel efficiency of their vehicles to 27.5 miles per gallon by 1985. For a few years, the bill worked as intended. The average fuel efficiency of American vehicles went from 13 MPG in 1975 to 19 MPG in 1980.

After leveling off between 1980 and 1985, average fuel efficiency actually fell over the next 20 years

The intent of the Energy Policy and Conservation Act of 1975 was to make all passenger vehicles in America more fuel efficient. But auto lobbyists convinced regulators to make a subtle change to the bill’s text. While efficiency standards for cars would be written into the law itself, the standards for trucks were to be set by regulators at the Transportation Department.

One of the first things that officials at the Transportation Department had to do was define what a truck was in the first place. Automakers convinced them to go with the vague definition of “an automobile capable of off-highway operation.” Thus, as long as an SUV had four-wheel drive and decent ground clearance, it could avoid the more stringent car regulations and instead be regulated as a truck.

Automakers also convinced regulators that any vehicle with a gross vehicle weight above 6,000 pounds should get a carve out.

When these emissions rules were first proposed, a third of vehicles produced had a gross vehicle weight of more than 6,000 pounds. In order to avoid regulations, automakers started producing heavier cars. By the time the rules were finalized and implemented a few years later, two-thirds of cars were heavy enough to avoid the regulations.

In 1978, faced with another oil crisis, Congress passed the “gas guzzler tax.” The idea of the law was to slap anywhere from $1,000 to $7,700 in taxes on vehicles that were well-below the minimum fuel efficiency standard. But lobbyists successfully convinced Congress to exclude the biggest gas guzzlers of them all: trucks. And because SUVs were trucks too, those got the carve out as well.

One of the best opportunities to close the loophole came in 2009 when Barack Obama took office. Then, like the 1970s, gas prices were sky-high. Then, like the 1970s, a new environmental movement was emerging, this time focused on climate change. But when the Obama administration redesigned fuel economy standards they left the loophole open.

Since Obama’s fuel economy standards were announced in 2009, the share of SUVs has doubled from about 25% to 50%.

In 2021 another opportunity to close the loophole emerged when the Joe Biden administration designed their fuel economy standards. But once again, regulators failed to close the loophole.