Also there's enough demand for high-margin cars to max out available production capacity, and would you want to be making major investments in ICE car production right now?
That's also what fuels some of the demand for high-margin cars, because of the perverse incentive that over-sized delivers higher margins. People will be too easily convinced to pay extra (generally at linear relationship) for size and there's not a linear relationship in size versus margins.
I think they're referring to the practice of making cars larger to pass as trucks so they are faced with more lax fuel-efficiency standards.
The "light truck" designation is made on the basis of features like cargo capacity and ground clearance. The Subaru Outback was properly classified as a car until the smaller PT Cruiser got its truck designation and they justifiably complained.
It's almost like there is a lesson to be learned. Make a "cheap" electric car worth buying, and people will buy it.
They are. CAFE target formulas have the footprint of the vehicle(s) in the denominator. Larger footprint = easier fuel economy targets
https://www.nhtsa.gov/sites/nhtsa.gov/files/cafe-ghg_my_2012...
> would you want to be making major investments in ICE car production right now?
I would if I were a car manufacturer, at least in addition to other projects that I may have investing in alternative fuels. I haven't dug deeply into all the issues VW is dealing with today, but it does seem at least in part due to an over investment in electric vehicles.
If I were really in that situation, though, I'd personally be investing heavily in designs more similar to the Chevy Volt with an electric drivetrain and onboard gas generator. Range anxiety goes away without having to pack a massive battery pack in the car, and the gas engine is much less stressed meaning easier maintenance and a longer life.
It's a combination of everything. Trucks keep getting bigger because it's how they game the fuel efficiency requirements. Small cars get bigger because of safety standards. Consumers in the US don't really want small cars, partly because we've gotten bigger a partly because it's terrifying to be on the road with the aforementioned trucks.
Similarly, cars seem really boring these days because most people want something big enough (i.e. CUV like the RAV4), and because safety standards for things like pedestrian impact have constrained the designers. So, we end up with a bunch of CUVs that I can't tell apart.
CAFE regulations (in a nutshell) require automakers' vehicles to meet a particular fuel economy per size of footprint, averaged across the vehicles they sell. So, they can meet the standards either by increasing the footprint of the vehicle, or by increasing the fuel economy of their vehicles, or both.
Maybe you're thinking of the strict emission laws regarding NOx and SOx that prevent diesel cars.
That's true, but US fuel economy standards don't actually require vehicles to be more fuel efficient in a direct way. They require vehicles to be a certain fuel efficiency for their footprint.
Unintuitively, while making a car larger doesn't make it more fuel efficient, it might make it better meet US fuel economy standards.