According to Jay Baron, President and CEO of the Center for Automotive Research (CAR) in Ann Arbor—the cost of meeting the 2025 regulations “is going to be greater than everyone says it will be even with mass production.” Here he also talks lightweighting, advanced processes, materials, and more:
At what point does the rising cost of vehicle compliance allow the over-the-horizon lightweighting technologies to enter production?
The industry is inching forward on new technologies. In the body structure the trend is to stay primarily with steel as long as possible. Clearly the lowest-cost strategy is to add high-strength steels then slowly introduce more aluminum and composites. Aluminum hoods and decklids have been popular for some time. Our latest survey says the next frontier is moving to aluminum doors. They’re coming on strong across the fleet. Going from steel to aluminum can be a fairly easy change; you can often use the same dies. It can offer a backup if there are issues. But going from steel to composite is different—no backup.
Engineers now say ‘every ounce counts’ in reducing vehicle mass. True?
That’s correct. We’re trying to remove weight by the ounce because it’s cheaper by the ounce. If you go for the ‘home runs’ that means going all-aluminum, which costs hundreds if not thousands of dollars more per vehicle. On top of that you have launch complexities and concerns about increased NVH, too. This industry introduces new technology incrementally. Even though there’s new technology on the shelf, the industry can only absorb so much introduction at any one launch. We only have so many engineers and every new technology has a certain development time and level of risk associated with it. The qualification for a new material can be decades long—I’ve been hearing about 3rd Generation steels for 25 years!
Mitigating “mass creep” from new vehicle to vehicle is a challenge, and some of it is related to emissions and safety compliance.
One company was concerned about the new frontal-offset crash standards adding weight. You think auto companies have gamed the system around fuel economy? They’ve also gamed the system around meeting crash requirements. That’s why they push 5-star ratings. Our team is looking at ‘scoring’ the crash test data of a car, over time. Because as cars have gotten heavier their crashworthiness has improved. I’m interested in seeing what we find.
What’s your bet on the Mid-term Review? Do you expect the regulators to retreat from the original 2025 plan?
Here’s what I think will happen. First, nobody looks good fighting ‘green’ technologies. Our industry doesn’t have the best reputation on this front. They’ve already got a lot of R&D sunk into achieving 54.5 mpg. And you have CEOs who have said they promise to make this work. They’re not going back on that promise. They may try to negotiate special credits for technologies not measured through the CAFE process but I don’t see the OEMs trying to change the regulations.
And your thoughts on the projected cost to the consumer for meeting 54.5-mpg?
The industry will meet the regulations one way or the other. We will lightweight these cars. However, I think the cost is going to be greater than everyone says it will be even with mass production. The price of raw aluminum is the price, for example—that’s not going to change. The regulators estimated the cost hit per unit was roughly $1800—and that’s cost, not selling price. The rule of thumb our team always uses to add overhead burden is to add 50%. So 1.5 times 1800 is $2800 added to the selling price. That’s based off 2010 model year and off the regulators’ estimate, which clearly is not going to be on the high side. The automakers’ estimate is going to be much higher than that.
If all of a sudden the car I want to buy is $4000 to $5000 more, that’s going to change what I do. And it’s going to change the industry.