Remember carburetors? They used to be a crucial part of pretty much every car engine. Bob Dylan, Van Morrison and Chuck Berry sang about them. But look under the hood of your car and, unless it’s a vintage model or you’re living in a developing country, you won’t find one. Tougher fuel emissions standards have caused them to be supplanted by fuel injection, a technology which until the 1980s was considered too costly for widespread use outside of performance cars.
There’s a lesson in that for the future of automobiles. We like to think the car industry is a free market where demand is driven purely by swings in consumer preference, but in practice, government regulations have shaped investment decisions for decades, and will continue to do so. Why is it that diesel cars make up half of Europe’s auto market and barely one percent in the U.S.? As Bloomberg’s Leonid Bershidsky has pointed out, it’s largely a result of European Union rules favoring diesel as a way of reducing CO2 emissions.
Via Sanat Patel.