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Any casual research would lead one to conclude that it's really not rocket science to make cars even fairly large ones to have 35 or 40 or more mpg. And since the average new car price in the US last year was $30,000 it seems that people have the money to pay for it. Assuming the car companies don't try to rape everyone by doubling the price of a car for $1,000 engineering tweak.
Lest we forget that the difference in manufacturing cost between a Cadillac and a Chevy is less than the sales tax of the vehicle....? Which it is.
So I'll even grant them a 100% markup on the differential cost to make a mid sized car that gets 40mpg. Still leaves me wondering why they would refuse. And before anyone starts with conspiracies with oil - keep in mind that high fuel carrying costs don't give an advantage to the sales volumes for cars.
Perhaps the problem with the law is that it doesn't go far enough. Make it so that it forces ALL car companies not just American car companies to stretch. If foreign fleets get slightly better mileage today then a few mpg more is to their advantage. But if the gap was much further than that then Toyota (80% of their product line is trucks and SUV's now) and Honda and the rest would have no distinct advantage either way. And Detroit, doesn't have a credible excuse any longer. Everyone is in the same spot.