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Toyota Calls For Fairness In Any New Corporate Average Fuel Economy Standards

December 6, 2001

In testimony given December 6th before the Senate Commerce Committee, a Toyota executive called for fairness, effectiveness and adequate engineering lead time in any changes made to the Corporate Average Fuel Economy (CAFE) standards.

Quoting a report on the CAFE system prepared for Congress by a National Academy of Sciences (NAS) panel, Jim Olson, senior vice president of Toyota Motor North America, said "The NAS report says that any changes should not 'impose higher burdens on those manufacturers who had already done the most to reduce energy consumption.'"

"Specifically, NAS said that to require each manufacturer to improve its own CAFE by a defined percentage -- the so-called Uniform Percentage Increase (UPI) approach -- 'punishes those who have done the most ... and seems to convey a moral lesson that it is better to lag than to lead,'" Olson continued.

Olson also stated that UPI would frustrate effective energy-conservation and environmental gains by causing higher-fuel economy vehicles to be replaced by lower-mileage vehicles from producers with lower fuel-economy targets. Olson noted that some industry experts have said that UPI stands for Unwarranted Punishment of Innovation in longer, separately submitted written testimony.

Olson called for Congress and the National Highway Traffic Safety Administration (NHTSA), which administers the CAFE program, to find ways to better align government desires and market demand. Meanwhile, according to Toyota, the company continues to improve the fuel-efficiency of each new generation of its many models.

"Although automakers improve product-by-product fuel efficiency, consumers determine the aggregate fuel economy of the 16 million new vehicles sold here each year by what they choose to buy," Olson continued. "Therefore, in shaping future energy policy, the burden of addressing fuel economy should not be placed solely on manufacturers. We have a large role to play, but Congress can help by passing incentive legislation to bring the consumer into the fuel-economy equation."

Olson also noted that NHTSA, not Congress, is best-qualified to deal with the complexities of improving the CAFE system and that "any future program must recognize the many years required to develop new technology, incorporate it into vehicles and bring them to market -- a process that cannot be turned on a dime without severe consequences."

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