Say what you will about Chrysler/Fiat CEO Sergio Marchionne; the man has somehow turned around the weakest of the Detroit Three and turned it into a money-making machine. But all is not well with Marchionne, who sees trouble ahead for all automakers, and that trouble comes in the form of the 54.5 mpg CAFE government mandate.
NBC News reports that Marchionne recently went on record as saying that V8-powered muscle cars, like Dodge’s own Challenger, will soon become “as rare as white flies.” Is Marchionne right, or is this a case of “the sky is falling.”
The V8 engine is no doubt losing market share for reasons outside of government mandates. High fuel prices are the number one killer of V8 engines, no doubt, as many Americans are also making more sensible choices when it comes to commuting cars. But Marchionne is right when he says that the new 54.5 mpg mandate, set to go into full effect by 2025, will change how the auto industry operates.
Furthermore, Marchionne’s assertion that the new CAFE mandate will “change the way the auto industry operates” is also probably on the money. But there are some important caveats that may give V8 muscle cars a bit of a reprieve.
Most importantly, the CAFE standards ARE NOT the same as the EPA window sticker numbers, which tend to be a good deal lower. The 54.5 mpg standard in 2025 will more likely work out to an average of 40 mpg. Furthermore, the CAFE standard allows certain alternative-fuel vehicles to count twice towards the CAFE standard. So, the more electric cars and hybrid an automaker builds, the more V8 muscle cars they can sell.
In short, Marchionne is right on one hand, but he underestimates how much Americans love V8 engines. They aren’t dead and gone yet, and American automakers have always figured out a way to keep performance cars as part of their portfolio.
The sky isn’t falling…yet.