When President Donald Trump announced in March that the federal government would return to its original schedule for updating fuel efficiency standards, few noticed the location of the speech – a test facility for autonomous vehicles on the site of a former Ford aviation factory.
There’s a natural link to be established between autonomous vehicles and efficiency efforts. Autonomous vehicles are the future of transportation and are poised to trigger a wave of disruptive innovation. By modernizing fuel economy standards to address this emerging technology, we can help unleash market innovation to reduce our dependence on oil. But current rules do not capture the continued low-emission development of autonomous vehicles.
Fuel economy standards address a specific challenge in the oil market – it is distorted, sometimes clumsily, by the OPEC cartel and foreign state-owned oil companies that control 90 percent of the world’s lowest-cost oil reserves. Fuel economy standards reduce imports of foreign oil and improve U.S. economic security by insulating us from oil price volatility. The national security risk posed by oil dependence in an unfree market was the impetus for originally developing the standards in the 1970s following the OPEC oil embargo.
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The decision to revisit fuel economy standards creates an opportunity to update the rules to provide relief to automakers and help the country realize the full benefits of autonomous vehicle technology.
A recent report from Carnegie Mellon stated that “the current fuel economy testing procedure does not have a mechanism to evaluate the impacts of AV technology on fuel economy ratings, and subsequent regulations such as Corporate Average Fuel Economy targets.”
This inability to measure the efficiency impacts of autonomous vehicles represents a gaping flaw in the regulations. If excluded from fuel economy standards going forward, autonomous vehicles may not achieve their potential to significantly reduce petroleum dependence.
There are already warning signs: the same Carnegie Mellon study showed that certain semi-autonomous features could capture significant fuel savings, but current regulations discount such efficiencies.
Fuel economy regulations should not disincentivize automakers from allocating resources to autonomous vehicles research and development, which promises to deliver dramatic reductions in oil dependence. As R&D budgets are finite, companies should be unleashed to invest in the technology that most effectively reduces fuel usage, whether that is designing more efficient engines or improving business models to encourage consumers to share rides.
Updating fuel economy regulations to adapt to evolving market conditions and changes in mobility is smart policy. It allows companies more flexibility to choose investment strategies that meet business objectives while lowering the oil dependence and boosting fuel choice in the transportation sector.
In this scenario, automakers would have increased flexibility to invest in the most impactful technologies, autonomous vehicle developers would be allowed to maximize fuel efficiency in the design and use of the technology, and the American consumer would get safer roads while reducing exposure to the unpredictable oil market. Everybody wins.
Mark Joseph is CEO and vice chairman of Transdev North America, which operates transportation networks. Joseph also serves on Securing American’s Future Energy’s security leadership council and can be contacted at email@example.com. Amitai Bin-nun is vice president of Autonomous Vehicles and Mobility Innovation at Securing America’s Future Energy and can be contacted at Abinnun@secureenergy.org.