For decades, the automotive industry was a technological backwater full of missed opportunities. Now, automakers worldwide are responding to new challenges with high-tech solutions. Today, the auto sector is seen as the fastest- evolving tech industry of them all.
The Old Days
Not more than fifteen years ago, the typical car still relied on technology commonplace in the 1930’s. Engines and transmissions resembled those from decades prior, albeit with the addition of electronics and emission controls. New technologies were available, but manufacturers proclaimed them unprofitable for mass production.
These cars worked sufficiently well for millions of drivers – just as similar ones had for most of the previous century. However, technology had long since moved on. This left the industry vulnerable to sudden changes.
And things were about to change – drastically.
The CAFE Conundrum
Following the Arab oil embargo of 1973, the U.S. government imposed fuel economy standards to reduce dependence on foreign oil. These were known as Corporate Average Fuel Economy (or CAFE) standards. Each manufacturer had to increase the average MPG of their fleet each year, or else pay a large fine.
The results were immediate. Starting in 1976, oversized passenger cars were marked for cancellation, and new models with advanced, fuel-saving technology were planned. Fuel economy increased through the remainder of the 1970’s and into the early 80’s. The auto industry was fully embracing innovation.
Then, in 1986, the Reagan administration suspended annual CAFE increases. This was in response to an oil glut. To save American gasoline producers from financial loss, the government backed down from requiring further increases in fuel efficiency from auto makers.
It was to prove a major setback.
Using Gas Like It’s Going Out of Style
Soon after the 1986 suspension of CAFE increases, America went on a gasoline binge. Plans for small cars and alternative-fuel vehicles were shelved. Once-unavailable high-performance V8 engines were back on the menu. Fuel-hungry trucks and SUV’s gained in popularity.
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