Edmunds CEO to Congress: Listen to consumers on fuel economy standards

(October 21, 2011) SANTA MONICA, Calif. — Edmunds.com CEO Jeremy Anwyl told Congress last week that consumer voices were ignored when the Obama administration laid out its latest proposal for future Corporate Average Fuel Economy (CAFE) standards, and that consumers are not on board with those standards.

Earlier this year, the Obama administration announced plans to raise the CAFE standard to 54.5 miles per gallon by 2025, which almost doubles the current standard of 30.2 mpg. Edmunds.com says that there is reason for consumers to be concerned that the high standards can only be reached through the development of new fuel-efficient technology that will likely drive vehicle prices higher.

Citing specific data gathered and analyzed exclusively by Edmunds.com and notable academics Dr. Ely Dahan and Dr. Anand Bodapati, Anwyl said that fuel efficiency accounts for only six percent of the typical consumer's decision to purchase a particular vehicle. This number climbs to just 15 percent for consumers in the heavily cost-sensitive segment of subcompact vehicles.

"Any study of actual sales makes clear that — for the vast majority of consumers — fuel economy is simply not their primary motivating factor when purchasing a vehicle," said Anwyl in his testimony before the House Oversight and Government Reform Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending. "It doesn't mean they don't care about fuel economy. It's just that other things are far more important."

The research suggests the price, aesthetics and functionality of a vehicle are considered far more heavily than fuel economy by most car-buyers today.

Anwyl pointed out that despite questions about whether consumers will be inclined to buy the next generation of fuel efficient vehicles, consumer voices were not included at the negotiating table where a tentative agreement about the vehicles was reached. Instead, a list of CAFE stakeholders prepared by the Environmental Protection Agency (EPA) consisted of special interests such as environmental groups, automotive firms, labor unions and electric vehicle charging firms.

"Consumers matter because responding to their needs is what drives innovation, and innovation is what should drive our economy," added Anwyl. "They matter because at the end of the day, they are the ones who will be asked to buy and drive the vehicles our government is potentially demanding that the car companies build. "

Anwyl's full testimony to the Congressional subcommittee is available online here. Video of the testimony is also available here.


Another concern for consumers about the proposed CAFE standard is the core issue of safety. As manufacturers seek to meet fuel-efficiency standards, they will naturally strive to reduce the weight of a vehicle. Over the years, studies have generally shown that larger, heavier vehicles are safer than smaller, lighter vehicles in the event of an accident. Anwyl highlights this concern in a recent published commentary.