DaimlerChrysler chief sour on fuel-economy mandates

Jan. 29, 2007
Dieter Zetsche, chairman of DaimlerChrysler, believes that the market– not government– should drive the development of fuel-saving technology

Dieter Zetsche, chairman of DaimlerChrysler, believes that the market– not government– should drive the development of fuel-saving technology.

“American policymakers must adopt a new and unique formula ... that encourages more technologies and more customer choice,” said Zetsche in a speech at the Washington Auto Show last week. “I've always thought CAFE [corporate average fuel economy standards] in the country that is the world’s model for a free-market economy to be a bit of a contradiction. It’s an attempt to regulate supply and not to use market forces to stimulate demand for more fuel-efficient vehicles.”

Zetsche said that trying to sell people what they don’t want is not a winnable business proposition. “It is that ‘anti-free market element’ of CAFE that makes life difficult for us,” he noted. “We’ve learned to live with CAFE and its modest increases. But we would be open to re-visiting the CAFE discussion for cars, as done recently for trucks, if it would make the regulation ‘size based’ and not ‘fleet based.’”

Zetsche also urged U.S. policymakers to stimulate greater demand and consumer choice for fuel-saving technologies – including clean diesel options – by providing equal incentives on powertrains that achieve lower fuel consumption with clean emissions.

“Clean diesel technology is a viable solution to reducing dependence on oil and improving air quality – though let me stress we are not pursuing diesel to the exclusion of other alternate fuel technologies,” he explained. “As automotive companies look to innovation, and to increasingly substituting petroleum products with biofuels, the modern diesel engine has plenty of the former, and great potential for the latter.”

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