Forced into Fuelish Decisions

By April 8, 2007Briefly Legal, Energy

From the Windsor (Ont.) Star:

Honda of Canada Inc. is “seriously considering” stripping some life-saving safety equipment out of the smallest car it sells in Canada to meet new federal fuel efficiency ratings.

The Honda Fit does not qualify for a $1,000 [CD] rebate under the new rules, announced in the federal budget two weeks ago, while the Yaris, produced by arch rival Toyota, does.

The difference can be explained by the extra air bags, side curtains, antilock brakes and other equipment that the Fit has but the Yaris does not, says Jim Miller, executive vice-president of Honda Canada.

“If we stripped all that out it would qualify,” Miller told a University of Windsor marketing class. “But $1,000 for a human life?” The Fit consumes 6.5 litres of fuel every 100 km [36.2 miles to a gallon], which is the cutoff point for the new federal incentive to buy fuel-efficient cars. The Yaris consumes 6.3 l/km and qualifies for the money.

Talk about your perverse, if predictable, incentives. Honda would make an entirely rational decision to lower each car’s cost by taking out safety components. It’s an equation we know all too well in the United States via Corporate Average Fuel Economy (CAFE) standards: Heavier equals safer equals more fuel consumption.

No wonder automakers in the United States are cool to the idea of increasing CAFE standards. And if new standards force smaller, lighter cars into production, you can bet someone will sue the auto manufactuers when an accident leaves people dead or injured. If Congress unwisely moves to enact higher fuel efficiency rules, manufacturers would be well served by having some tort protection written into the bill. If possible.

P.S. With the Canadian Dollar running at a recent high of about 87 cents against the U.S. dollar, Canadians are paying the equivalent of $3.29 to $3.72 U.S. per gallon. (Calculation chart here.)

(Hat tip Tim Blair.)