NCPA - National Center for Policy Analysis


July 28, 2004

According to financial analysts, the United States will likely join other countries in implementing new emissions standards within the next decade, but new standards will not bode well for domestic automakers:

  • Ford will spend $403 more per car to meet new standards, while General Motors will spend about $377; Toyota will spend $170 per car and Honda, $24 per car.
  • Ford's profits, however, are expected to decrease 10 percent by 2015, while GM's will be about 7 percent lower.
  • Meanwhile, Toyota's profits will likely increase about 8 percent and Honda's profits, 3 percent.

Both Ford and GM rely on less fuel-efficient SUVs and pick-up trucks for profits. Indeed, the majority of Ford's sales (about 60 percent) are from less fuel-efficient light trucks, accounting for 80 percent of their profits, say analysts. Therefore, GM and Ford will have more difficulty making the transition to a more fuel-efficient fleet.

Toyota and Honda, on the other hand, have invested more in fuel-efficient and hybrid cars. Consequently, the new regulations will actually help them generate profits, say observers.

Source: Danny Hakim, "Catching Up to the Cost of Global Warming," New York Times, July 24, 2004.


Browse more articles on Environment Issues