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Toyota Feeling Heat Over CAFE

Toyota is getting it from all sides: from pundits to scientists to celebrities to loyal fans, people are lining up to complain about Toyota's fighting for a slower increase in fuel economy standards.

Today nine environmental and science-based organizations including the Union of Concerned Scientists joined together for a website and ad campaign targeting Toyota for fighting alongside its auto brethren from Detroit against CAFE standards proposed by Congress.

Toyota is sticking with Big Auto not because of some conspiracy or secret club, but because like the other auto makers it wants to continue to be able to sell luxury vehicles, big trucks and SUVs that get poor gas mileage but also are very profitable to sell.

Toyota's Irv Miller says asking car makers to reach 35 mpg by 2020 is a bar that is "set too high for all competitors."

However, it is entirely feasible that a broad offering of cars, SUVs and trucks could be sold that meet those criteria in the short term, and even today. But the biggest and baddest vehicles like the 13 mpg (city) Land Cruiser or the 15 mpg Tundra would have to be substantially re-engineered for more fuel efficiency, and that's what Toyota doesn't want.

Miller also defends Toyota's decision because conditions aren't the same here as in Europe and Asia. This is really THE point that would make all of this bickering moot. He says the EU has higher fuel economy because "of higher fuel prices, steep fuel and vehicle taxes, different driving conditions, smaller vehicles and dramatically different customer tastes."

These are all true, underscoring the more significant point -- in the U.S. the cost of fuel (and by extension driving) does reflect its environmental cost, whereas elsewhere around the world the two are more closely correlated.

So, if we got rid of the oil industry incentives that encourage more exploration, levy a higher gas tax, and weight vehicle sales tax towards fuel economy, then U.S. consumer tastes would change.

Is that really what Toyota et al want? So their choice is to tolerate new CAFE standards and meet them with plug-in hybrids, diesel vehicles and fewer monster SUVs and trucks, or later fight these larger issues. Congress' CAFE proposal lets them make only moderate adjustments to their business; but carbon taxes and higher fuel cost could force more radical changes. It's better for Toyota to happily lose this battle.

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