Because of new fuel economy requirements, CAFÉ standards for the Fiat Chrysler line of vehicles will undergo changes in vehicle design over the next decade. Why the sudden shift? Today, car manufacturers that produce fuel efficient vehicles, which exceed minimum standards, receive EPA credits. Credits can also be applied to electric vehicles.
The Issue with Fiat Chrysler
While this system works well for auto manufacturers like Toyota, who emphasize small to medium size vehicles, Fiat Chrysler is somewhat in a bind. Fiat’s major market focuses on larger pickups and vehicles which are simply not as fuel efficient. Moreover, the sales of small to mid-size cars for Chrysler are fairly poor
Developing technology for electronic vehicles is also very expensive – and as seen with the Volt, not all that successful. Fiat may be a victim of their success with large vehicles, since they have difficulty meeting minimum fuel economy standards
However, there are other standards that all automakers must comply with:
- Increase overall fuel economy
- Pay EPA fines if targets are not met
- Purchase credits from other automakers
If Fiat Chrysler doesn’t meet the target for minimum standards, it must pay fines or purchase credits from other automakers. It’s a lose/lose situation. Consequently, the company is improving the Ram’s fuel economy, in spite of the potential drag on sales.
Making matters worse, some automakers are simply not interested in selling their credits. The Dodge Ram will be the Fiat’s project for better fuel mileage – which may mean a smaller pickup and less overall power. Customer demand, due to high fuel prices, is also driving these changes as well.
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