Getting to 60 mpg: "You must play boldly to win"

Arnold Palmer, one of the greatest to ever play men’s professional golf once insightfully said, “You must play boldly to win.”

While I’m not a golfer, it’s still one of my favorite quotes.

This week, the Obama Administration is scheduled to make an announcement that will lay the groundwork to set new pollution and fuel efficiency standards for 2017 to 2025, creating more efficient, lower polluting and money-saving cars and trucks for the American people.  The rule is expected to propose a range of options, possibly from 3 to 6 percent improvement per year, corresponding to roughly 45 to 60 mpg by 2025.

To put the U.S. auto industry in a position to win, the Obama Administration must set the standard at a bold, ambitious level. Our analysis shows that setting the bar at 60 mpg would result in the U.S. auto industry becoming leaders in hybrid and electric cars. A 60 mpg standard will unleash American innovation and help put American manufacturing back on its feet.  In contrast, a 45 mpg standard will banish the U.S. to permanent laggard status in this critical race.

Foreign car companies are already producing cars that can meet 60 mpg standard (see “Clean Green Cars” for one list of high mileage cars available in Europe) using technologies such as hybrid and advanced clean diesels. If we want to keep American auto jobs in America, we must create the game-changing technologies that will allow us to not only retain jobs, but also to create them.

It is no coincidence that the world’s biggest carmaker by sales volume is also the company that produced the groundbreaking, fuel-efficient Prius. Rest assured, Toyota will not simply sit back over the next few years and allow American automakers to catch up when it comes to fuel efficiency and market share. Toyota plans to introduce six new hybrids, gasoline-electric vehicles by 2012 worldwide as well as an electric version of its RAV4 in November.

The Japanese and Germans are not the only competitors that we have to watch out for. The Chinese government is now putting its full weight behind its nascent auto industry’s ability to leap frog over the U.S. and become the global leaders in clean cars. The U.S. cannot afford to be asleep at the wheel when it comes to taking this new competitor seriously. One only has to look at the wind and solar industries (not to mention flat screen TVs) to realize the magnitude of this threat (and don’t count BYD out…).

Fortunately, according to the consulting firm McKinsey, it’s not too late. The U.S. still leads this race, but just barely. There are also signs that the American automakers are beginning to recognize the value of leading the market, rather than chasing it, when it comes to fuel efficiency.  General Motors Co. will begin selling the 2011 Volt later this year in Michigan, California, New York, New Jersey, Connecticut, Texas and Washington, D.C.—and it already appears that there will be plenty of consumer interest.  Forbes reports that next year there could be 40,000 to 50,000 electric cars on the market in the U.S, but 200,000 people will want to buy those cars. By 2020, electric and hybrid vehicles could represent as much as one-fourth of Ford’s fleet.

The United States is the home of the Wright brothers, Henry Ford, George Eastman and Bill Gates—surely there is no shortage of innovative engineering talent to achieve an average fuel economy standard of 60 MPG for our nation’s vehicles. 74% of the American public overwhelming support 60 mpg in part because they want U.S. auto industry to be leaders (see a recent poll by the Mellman Group ).

Innovation is the key to winning back our leadership role in the worldwide automotive industry. The Obama administration can do its part this week by acting boldly by supporting a 60 mpg standard.