As the District prepares to kick off the 2013 Washington Auto Show, organizers hosted a policy summit this week to discuss industry prospects and consumers’ response to the automakers’ latest green technology.
The two-part conference began with a panel discussion from auto industry experts about consumer, policy and economic pressures on the auto industry. Alliance of Automobile Manufacturers chief executive Mitch Bainwol, National Auto Dealers Association board member Don Chalmers,
industry analysis firm IHS Automotive research director Rebecca Lindland, Environmental Protection Agency’s Office of Air and Radiation assistant administrator Gina McCarthy, and California Air Resources Board chairman Mary Nichols participated in the conversation.
The second panel featured comments from the automakers themselves — American Honda Motor Co. Environment and Energy Strategy Senior Manager Robert Bienenfeld, Chrysler Regulatory Affairs Director Reg Modlin, and Toyota Motor North America Vice President of Energy and Environmental Research Tom Stricker participated.
Here are five takeaways from the conversation:
1. Today’s consumers are more interested in energy efficient cars than they were a few years ago.
Diesel and hybrid sales in 2012 were twice that of the past five years, said EPA’s Gina McCarthy, suggesting an optimistic outlook for the energy efficient car market.
2. Consumer attitudes toward driving are changing.
Young adults are increasingly waiting longer to get their drivers licenses, and are more amenable to sharing cars with each other instead of buying their own, IHS Automotive’s Rebecca Lindland said.
These behavioral changes might lead consumers to buy fewer cars in general, she said. She noted that IHS’s forecast for outgoing car sales will be significantly less than previous years, though IHS has not publicly released by how much.
3. For those who are still buying cars, the relatively high cost of energy efficient cars is a significant deterrent.
The average income of the owner of a Chevrolet Volt or Nissan Leaf — hybrid and electric cars respectively — is about $150,000 a year, Lindland said, whereas for the car industry overall, it’s $68,000 a year.
The auto industry’s pricing could be “delaying the greening of the fleet,” she said, because consumers are constrained by what technology exists in their price range.
Consumer flexibility is also affected by the availability of financing, National Auto Dealers Association board member Don Chalmers said. “Ninety-percent of the cars I sell are financed,” said Chalmers, who sells cars manufactured by Ford.
4. Automakers hope the greater pull for energy efficiency comes from consumers, and not exclusively from policymakers.
The energy efficient market is now moving beyond government support as consumers realize how they can cut costs and emissions with efficient cars, Chrysler’s Reg Modlin said. But the best impetus for energy innovation should be the “market pulling technology. It can’t be forced,” he said.
5. And raising gas taxes isn’t the solution, automakers say.
Some policymakers — notably energy secretary Steven Chu in 2008, though he retracted his view last year — predict that higher gas prices will encourage consumers to find energy efficient alternatives to gas-dependent vehicles.
But it could just encourage consumers to buy less, not to buy differently, automakers said.
“The idea that we’re going to funnel consumers into a policy-driven choice is overly optimistic,” Honda’s Robert Bienenfeld said.
“The first thing that happens when prices go up is people downsize, it’s not a push for different fuels,” he said.