As I will illustrate using a few simple charts, the SCOTUS and the EPA might be doing the Big 3 a favor by forcing them to improve the fuel efficiency of their fleets. As the Union of Concerned Scientists points out, the Asian carmakers have vehicles that are on average more environmentally-friendly:
Each automaker has been scored on the average per-mile emissions of global-warming and smog-forming pollutants from the vehicles it sold in MY2005. The emission average across all eight manufacturers is defined as a score of 100, and each automaker is assigned a score indexed to this average. Thus a score of 80 indicates that an automaker's average emissions across all vehicles is 80 percent of the industry average. Lower scores indicate lower emissions.
(To enlarge an image, click on it.) The Environmental Score rewards fuel efficient vehicles because increasing fuel economy reduces global-warming pollutants. I correlated the Environmental Scores with U.S. vehicle sales figures from Auto Data Corporation. Manufacturer's market share reflects totals when applicable: G.M. (includes Saab), Ford (includes Jaguar, Land Rover, Volvo), DaimlerChrysler (inludes Mercedes, Maybach), Volkswagen (includes Audi, Bentley). In the following bubble chart, the size of a bubble reflects market share for Q1-2007, the vertical axis measures the percentage change in total vehicles sold from Q1-2006 to Q1-2007, the horizontal axis is the manufacturer's average Environmental Score:
Recall that a lower environmental score, means less pollution, and that the industry average is 100. The chart gives a natural segmentation between the environmentally-friendly Asian carmakers, and the less environmentally-friendly Big 3 U.S. companies. Volkswagen scored around the industry average. More importantly, the Japanese carmakers all sold more vehicles in Q1-2007 compared to Q1-2006: Toyota sold 11% more vehicles, while Honda and Nissan sold 6% more vehicles compared to Q1-2006. The Big 3 U.S. carmakers all sold less vehicles in Q1-2007, with Ford selling 13% less than it did in Q1-2006. From the chart, one can detect that the Environmental Score and Year-over-Year change in total sales are quite negatively correlated.
The next chart is similar to the previous bubble chart, except the vertical axis measures the (absolute) change in Market Share from Q1-2006 to Q1-2007. Since total U.S. vehicle sales was down 1% from Q1-2006, we expect the Japanese carmakers to have gained market share:
Toyota's market share was 1.74% higher compared to its market share in Q1-2006; Honda gained 0.63% and Nissan gained 0.49% in market share. On the other hand, the less environmentally-friendly Big 3 all lost market share in Q1-2007: in particular Ford's Q1-2007 market share was 2.28% lower than what it was in Q1-2006.
The Environmental Score compiled by the Union of Concerned Scientists is something the Big 3 should take seriously. Detroit's low Environmental Scores are not simply due to their propensity to build larger vehicles. As the full report points out, Toyota produces vehicles of all classes, but their fleet is still more environmentally-friendly than Detroit's.
While things change slowly in the American auto industry, there are some positive signs. Ex-Boeing executive now Ford CEO, Allan Mullaly, an auto industry outsider, seems to be bringing a fresh perspective (WSJ, subscription required):
Ford President and Chief Executive Officer Alan Mulally says the Supreme Court ruling earlier this week that federal environmental regulators have a duty to consider limits on the carbon dioxide chugging out of vehicle tailpipes made him even more committed to improve fuel efficiency, develop alternative fuels technology and advanced engines. "The citizens of the U.S. are really going to decide what we want to do about energy and what do we want to do about the environment," Mr. Mulally said in a dialogue with reporters on the sidelines of the show. "The cars you see today are what customers want. The customers are going to decide, not Ford."Based on recent history, it might take years for the Big 3 to catch up with the Asian automakers. Toyota has a shot at overtaking G.M. in terms of market share, AND replacing Honda as the greenest automaker.
UPDATE: NPR's Science Friday on Green Cars.
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