Joe Ligo has written one of the most interesting automotive articles I have come across in quite some time. Over at The Autopian website he analyzes why the small car died in the United States.
Ligo (2024) notes that this has been blamed on “everything from gas prices to identity politics to the ‘SUV loophole,’ to crash safety, to our insatiable demand for SUVs and trucks.” However, he argues, “Inflation and interest rates have a much larger impact on our car buying habits than often get credit.”
Why? So many people buy cars on credit that their monthly payment can weight more heavily in their decisions than either the total purchase price or gas mileage. Over the last decade larger sport-utility vehicles have become more popular partly because they have been affordable due to a combination of low interest rates and extending loan lengths from 60 to 72 months. Recent hikes in interest rates appears to be starting to shift buyer behavior.
Government policies help spur bigger vehicles
Ligo’s piece is worth a read so I won’t summarize more here. Instead, I would like to flesh out a few additional thoughts. One of my key takeaways is that government policies can have a major impact on consumer behavior.
As a case in point, a loophole in federal CAFE fuel-economy standards allowed trucks and SUVs to mushroom in popularity — thereby undercutting the whole point of the regulations. If the so-called SUV loophole had been plugged and gas taxes increased more regularly, the U.S. automotive market might not have shifted so radically to larger vehicles.
Also see ‘Popularity of SUVs could offset climate advantages of EVs’
Alas, significant action by either political party has thus far not occurred. For example, the Obama administration’s changes to fuel-economy standards arguably led to an increase in vehicle sizes — and more SUVs on the road.
“The Big 3 benefited so laughably much from CAFE being restructured to basically specifically reward them and punish manufacturers that didn’t compete directly in their space that I wouldn’t be surprised if their lawyers wrote it,” Autopian commentator Logan King opined (2024). “It’s absurd it was ever paraded about as a win for fuel economy standards for the Obama administration when even at the time people were noting why GM and Ford were so strongly in favor of the changes.”
Indeed, bigger vehicle sizes were predicted by University of Michigan researchers back when the standards were introduced (Sofoe, 2011).
SUVs face headwinds in transition to electric power
Ligo notes that the U.S. isn’t the only nation where the fate of smaller cars is in question, but he points to the views of Citroën’s CEO Vincent Cobée, who suggests that the demise of SUVs is inevitable with the transition to electric power. This is because their greater weight and weaker aerodynamics reduce battery range.
“On a battery EV, if your aerodynamics are wrong, the penalty in terms of range is massive,” Cobée told Clean Technica. “You can lose 50 kilometers between good and bad aero, and between an SUV and a sedan you’re talking 60/70/80 kilometers very easily” (Hanley, 2023).
Cobée acknowledged that “numbers are not telling me I’m right,” noting that even in Europe, SUVs have made up 50 percent of new car registrations in recent years. However, some jurisdictions are starting to tax vehicles by weight. That could reduce their popularity (Hanley, 2023).
Share your reactions to this post with a comment below or a note to the editor.
RE:SOURCES
- Hanley, Steve; 2023. “Citroën CEO Says Electric Cars Will Kill The SUV.” Clean Technica. Posted an. 16.
- King, Logan; 2024. Commentator in “How The Small Car Died In America.” The Autopian. Posted April 1.
- Ligo, Joe; 2024. “How The Small Car Died In America.” The Autopian. Posted March 30.
- Sofge, Erik; 2011. “Study: CAFE Standards Could Mean Bigger Cars, Not Smaller Ones.” Popular Mechanics. Posted Dec. 8.
It is my understanding that the Kia Rio replacement vehicle is the Kia K3, which is a 2024 model. I do not know if Hyundai has a replacement model announced for the Accent.
I do not understand why G.M. discontinued the Cruze platform and kept the Malibu instead. It was a proper wheelbase and the best platform for the future, in my opinion. The same goes for Ford’s Focus platform. Weight and excessive sheet metal are the enemy. These platforms were made crash-standard compliant with their introduction in 2008 and 2012 respectively. Both cars received very good safety ratings from the I.I.H.S. tests in both overall crash ratings and side-impact ratings. If the demand for EVs have leveled off for the time being, why buy a compact EV with the weight penalty ?
James, that’s true about the K3 but it is somewhat bigger than the Rio, e.g., a wheelbase of 105 inches (versus 102 for the Rio) and length of 179 inches (versus 173). In contrast, Hyundai’s replacement for the Accent is a crossover called the Venue that’s smaller on the outside (a wheelbase of 99 inches and length of 159). I have adjusted the relevant text to clarify.