Long ago, a mechanical engineer once told me that cars can be optimized for efficiency, for performance or for maintainability, but not for two of the three. Few consumers have met that engineer, but the auto market teaches us that to gain acceleration we sacrifice fuel economy, and to cut emissions we need to tolerate expensive technologies that can often gut performance.
Cars are intrinsically about engineering tradeoffs. Automakers use appearance to differentiate their models and they are supposed to report performance and efficiency honestly. Regulators supply the minimum safety, emission and efficiency standards, and eventually they check up on compliance. Consumers often give cursory attention to mileage and emission stickers and provided the car is an obvious gas-hog, their attention returns to admiring the color, lines, interior appointments and affordable financing. Consumers rely on honest car data.
Some auto makers have not met the regulator’s standards. Most recently Peugeot headquarters was raided by French regulators looking for evidence of fuel economy and emissions fraud. Importantly, none was found. In January 2016, the French government had reviewed emissions for domestic and foreign cars. Renault was named for exceeding French standards for the levels of carbon dioxide and nitrogen oxide emissions in some of its car models. The matter was amicably handled with engineering corrections planned for the near term. Renault is one-sixth owned by the French government.
In April 2016, Mitsubishi admitted to false fuel economy reports made to regulators and consumers for some if its “mini cars” (600cc engines) popular in Japan. Annually, Mitsubishi’s management had been announcing its efficiency target based on the Japanese government’s efficiency target. Then Mitsubishi’s engineering staff acquiesced and over several years a miles per gallon deficit of 5% to 10% built up. Due to the manufacturing agreement between Nissan and Mitsubishi, some of the underperforming vehicles were sold under the Nissan name. The issues are not yet resolved.
Following through on its August 2014 promise to audit automakers’ fuel economy assertions, the EPA found that the C300 4Matic from Mercedes Benz overstated economy by 1 mile per gallon. Going forward the model’s fuel economy sticker will reflect the slightly lower number. Like many other car makers, Mercedes conducts many fuel emission and economy tests, and like others, it had been reporting only the best of those results.
In a much bigger haul in 2012, the EPA found that 1.2 million vehicles from Hyundai and Kia fuel efficiency “by 1 to 6 miles per gallon” on the “Hyundai Accent, Elantra, Veloster and Santa Fe and the Kia Rio and Soul.” The manufacturers created a repayment program for customers to reimburse for their lower mileage. The pair were fined $100 million in cash and $200 million in emission credits.
In 2013 and 2014, Ford notified the EPA of restated fuel economy estimates for seven models of its hybrid cars. Most restatements were a drop of 1 to 5 miles per gallon, but a Ford announced a 7 miles per gallon drop for the Lincoln MKZ. Aside from the better estimate of economy, Ford planned to offer customers a “courtesy payment.” These fake results are annoying and deserve serious penalties that focus on the consumer.
Volkswagen’s deception on automotive emissions was more malicious. For the cars in its so-called “clean diesel” lineup, VW installed car-computer software that detected when an emissions test was likely being conducted. The software then introduced fake data to keep the pollutant results within “acceptable” levels. This mechanism is called the “defeat device” and also seems to have been used by Porsche and Audi during 2008-2015. In mid-April 2016, a US court announced that VW will buy back 500,000 vehicles equipped with the defeat device. This buy-back (leased vehicles are also eligible) is most of the $18 billion in costs that VW faces, so far. There may be other regulatory sanctions that VW faces, but reimbursing consumers is a good start.