Making Small Cool – the case of cars

My “Stuff Stuff” article argued that if we are to save the planet “we cannot and should not aspire to every household in the world owning a 2½ ton SUV”. Cars are an emblematic and critical illustration of our need not just to decarbonize but dematerialize economic activity. Electrification and energy efficiency is not enough. We have to do more to curb demand growth to help curb our net usage of resources.

This does not mean that we are going to have to ban cars and just use public transport, ride bikes and scooters or simply walk. Electric vehicles will undoubtedly help. But they would help a lot more if we weaned ourselves away from the American-led passion for big cars (see my response to Noah Smith’s post on this topic). I address this in a follow up piece to “Stuff Stuff” for Jackson Hole Economics, entitled “Making Small Cool”.

Ford F Series Pick Up

Take the comparison between the US and Japan. In the US, the best selling ‘cars’ are actually huge pick-ups like the Ford F Series, Chevrolet Silverado and the Dodge Ram. It is easily forgotten that a catalyst for the US – and increasingly global – mania for pick-ups and SUVs was successful auto industry lobbying for laxer emissions standards on light trucks back in the 1970s. ‘Shifting the metal’ marketing did the rest.

Honda S660

By contrast, the best selling cars in Japan are micro ‘kei’ cars such as the Honda N box and cooler variants such as the S660 roadster. These cars are less than half the size and weight, and a third of the price, of the US bestsellers. Again, government action, in the form of lower taxes and exemptions for kei cars, has been critical in shaping this.

Europe, where the best selling car is the VW Golf, leans more towards Japan than the US, but it has nevertheless caught the SUV bug over the last few years. Environmentalists are now fighting this bug (see here), and social pressures might start a shift in marketing fashion towards smaller cars. But progressive taxes on the purchase, usage and disposal of larger cars could radically accelerate this. And as I will argue in forthcoming posts, they would also serve to address the massive underutilisation of the existing car fleet and to replace the loss of fossil fuel tax revenues as electric vehicles take over. Making small cars cool could help us win the ‘Race to Zero’.

About markcliffe

Board Advisor and Thought Leader on the impact of disruptive change. Former Chief Economist of ING Group
This entry was posted in Cars, Climate Change, Sustainability and tagged , . Bookmark the permalink.

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