May 14, 2025 • 15 mins
The automotive industry was forced to shift during the energy crisis of the 1970s. Some companies and designs were successful, while others were not. What emerged from the era, how did it shape the public's taste, and how did it change car designs for the future?
Fuel for the Future is presented by State Farm Insurance and driven by America's Automotive Trust www.americasautomotivetrust.org
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:02):
The 1973 oil crisis
is a historical moment that reshapednot just the auto industry,
but the very foundation of modern energypolicy.
The long lines at gas stationsand rationing that followed were
a sudden cultural shockfor the Americans, accustomed
to cheap fuel and big cars.
(00:22):
Today we'll look at the economic shiftsand international tensions
that ignited a crisisthat would force the automotive industry
to rethink everything and discusssome of the cars
and design trendsthat came out of the era.
This is fuel for the future,presented by State Farm
Insurance and driven by America'sAutomotive Trust.
I'm Michael May.
(00:44):
There were many eventsthat led to the oil crisis
in 1973and the energy crisis later in 1979.
In the early 70s,the global oil market was under strain.
Demand for oilwas skyrocketing due to postwar
economic booms in the United States,Western Europe, and Japan.
America in particularwas at the height of the muscle car era.
(01:07):
Big engines, big cars and cheap gas.
but behind the scenes,some important events were in motion.
By the late 1960s.
US domestic oil production had peakedand were in decline.
Imports were steadily increasing,making the US more reliant on foreign
oil, particularly from the Middle East.
The country was vulnerable,but few in Washington or Detroit
(01:30):
wanted to acknowledge it.
And then in 1971, President RichardNixon took the US off the gold standard,
causing the dollar to devaluesince oil was priced in dollars.
Oil exporting countries foundthat they were earning less in real terms.
This planted early resentmentamong OPEC nations,
who were now motivated to raise pricesto offset the weaker dollar.
(01:52):
And both Libya and Iran beganaggressively negotiating higher
oil prices and exerting more controlover their natural resources.
And then there was a tipping point.
The Yom Kippur War.
Everything came to a headin October of 1973, when Egypt and Syria
launched a surprise attack on Israelduring the Jewish holiday.
(02:13):
The United States quicklybegan supplying arms and aid to Israel.
In response, the Organization of ArabPetroleum Exporting Countries,
which included Arab members of OPECplus Egypt and Syria,
declared an oil embargoagainst the United States,
the Netherlands, Portugaland South Africa.
The embargo slashed oil exportsby about 5 million barrels a day.
(02:38):
Prices skyrocketed for Americans.
The most visible consequences were longlines at gas stations and fuel rationing.
For a nation that had taken cheap fuel for
granted, this crisis hit hard.
Some key political actions were madeattempting to help, like the Emergency
Petroleum Allocation Act in 1973,which gave the federal government
(03:02):
authority to control, distributeand pricing of oil.
There was the national speed limitin 1974 of 55mph,
which was an effort to conserve fuel.
But these actions did not offerimmediate relief.
And the Iranian Revolution later inthe decade caused even more disturbance.
now, apologies for all the boring historylesson type stuff.
(03:25):
But these events had a lasting impacton automobiles.
In the monthsfollowing the 1973 oil embargo,
American consumers found themselvesreassessing not just their fuel budgets,
but their entire relationshipwith the automobile.
Instead of thinking about horsepower,big engines and big cars,
(03:45):
now the public was thinking about milesper gallon.
Some sports cars saw their horsepowercut in half,
and models made in this period,now called the malaise era.
Let's take a closerlook at how the auto world responded.
In the United States.
At General Motors.
(04:06):
At the time of this embargo,GM was the world's largest automaker.
It held around 45% of the UScar market and sold millions of vehicles
across its Chevrolet, Pontiac,Oldsmobile, Buick, and Cadillac divisions.
Ed Cole, GM's president, had overseenthe development of the Chevrolet Vega,
intended to be a compact,fuel efficient car.
(04:29):
The Vega featured
a lightweight engine and was hailedas a technological step forward,
but it was rushed into productionand there was poor quality control leading
to engine fires, rust issues, recalls,and the engine was rough and noisy.
On top of these mechanical issues,there was a strike at a plant in Ohio
that produced the Vega.
(04:50):
And production ended in 1977.
Then they attempted another importfighter, as they called
it, with the Chevrolet Chevette.
another compact and fuel efficient car,
Chevette approval came in December 1973,
with the car needing to be productionready by the fall of 1975.
(05:11):
Two soon for an all new design, Chevettecast iron inline belt driven single
overhead camshaft came in a standard 52horsepower 1.4l engine,
and it had an optional 60 horsepower1.6l version.
There was a four speed manual optionor a three speed automatic transmission in
(05:31):
GM estimated the Chevette to sell well.
But in 1976, larger carswere starting to hit the market again,
and Chevette was not very successful.
However, by the energy crisis of 1979,GM had a better understanding
and foundation to build uponto create compact cars for the market.
(05:52):
Meanwhile,at Ford, Ford was better positioned
thanks in part to Lee Iacocca,the visionary behind the Ford Mustang.
Under him, they released the Ford Pinto
in 1971 as a subcompactwith a price under $2,000,
explicitly designed to competewith Japanese imports.
Iacocca pushed for the Pintodespite internal resistance,
(06:14):
and it soldwell over 100,000 units in its first year.
But it would later face scandal oversafety concerns involving its gas tank.
Nevertheless, Iacocca'sinstinct to move toward smaller,
more economical vehicles proved prescient.
After being ousted from Ford in 1978,Iacocca would carry
those instincts to Chrysler,
(06:35):
where he played a central rolein the next phase of fuel efficiency.
More on that shortly.
At the Chrysler Corporation.
By 1973,they had become financially fragile
and heavily dependent on sales of largersedans.
Their initial response to the crisiswas rather weak.
(06:55):
And by the late 1970s,the company was near collapse.
When Lee Iacocca took over as ChryslerCEO in 1979,
he leveraged federal loan guaranteesand introduced the Car
platform Compact front wheel drive carslike the Dodge Aries
and the Plymouth Reliant.
These vehicles were more fuel efficient,affordable and crucially profitable.
(07:19):
The cars, combinedwith the introduction of the minivan,
helped save Chryslerand influenced others in the industry.
At American Motors Corporation, AMC,
the smallest of the Big Four,found themselves ahead of the curve.
They made some of the most forwardthinking moves during this time.
(07:41):
Where they were focused on smaller,more efficient models
like the Gremlin, the pacer, and laterthe spirit.
Though quirky in design, these carswere some of the first American vehicles
explicitly built for a futurewhere size and power.
Were less important than miles per gallon.
AMC also began early explorationof electric vehicles,
(08:04):
working with the US Postal Service to testbattery powered jeeps and delivery vans.
Decades ahead of the EV curve.
The American manufacturers are remembered
for being somewhat controversialduring this era.
A few other points of interestis that Ford replaced the Mustang
with the Ford Mustang two, a platformwhich in its first year
(08:28):
was 800 pounds lighterthan the previous generation of Mustangs.
It also had a 105 net horsepower,
which is abouthalf of the previous year's.
Some cars were redesigned to fit inentirely different automotive categories.
For example, the Mercury Cougarand the Dodge Charger
were transformed from muscle carsto luxury cars.
(08:51):
Chevy continued to offer its Chevelle,but they discontinued
the SS Performance Package in 1973.
While the AMC javelin,the Plymouth Barracuda, the Pontiac GTO,
those were all modelsthat were canceled entirely in 1974.
Ford's sales fell 47%
(09:12):
and Chrysler sales dropped 27%
from 1978 to 1982,
while at the same time import cars
saw an increase in sales.
And that brings us to probablythe most important aspect of this
era the growth of the import car.
(09:33):
Japan and Germany,for example, were seizing the moment.
While Detroit was
retooling its factories and philosophies.
Japanese and European automakershad dealt with high fuel prices
in the past and marketsthat had demand for compact cars.
They were ahead of the curve, so to speak.
(09:56):
And American buyers saw these importsas an answer to the oil crisis.
The Toyota Corolla was already gainingpopularity
in the US,but it became a star during this era.
It offered a 1.6l engine, excellent fuel
economy and, crucially, reliability. U.S.
consumers were initially skepticalof Japanese cars, but they were impressed
(10:19):
by how these vehicles held up over time.
Toyota had made it a priorityto penetrate the American market
by ensuring Toyota vehiclesmet US standards, while keeping
production costs low through the famedToyota Production System.
At Honda, which had been knownfor its motorcycles
(10:39):
before the 70s, had turned their spotlightto the Honda Civic,
which was introduced in 1972with its civic engine.
Honda had a massive edgein performance and cost.
The company was also deeply committedto precision
engineeringand the Civic's lightweight frame.
(11:00):
Impressive fuel economy over 40 miles
per gallon on the highway,and low emissions
made it not just a consumer success,but a regulatory darling.
and over at Volkswagen in Germany.
They had a long presence in the USwith the beetle.
But by 1974 they unveiled the VW rabbit,
(11:21):
known in Europe as the Golf,
which would becomeone of the most successful
compact cars in the world.
It's front wheel drive layout,modern hatchback design and impressive
fuel economy positioned itperfectly for the post-crisis market.
Rudolf Lighting,the chairman of VW at the time, pushed
hard to modernize the companywith its lineup, with the rabbit
(11:45):
as the flagship of a more fuel consciousfuture.
These imports put pressureon American companies at the time,
and it had a lasting impacton the entire industry.
The 1973 oil crisis didn't
just push the car industryto make more fuel efficient cars,
(12:05):
it forced them to rethinktheir very identity.
American companies
that had long rested on their laurelshad to pivot toward innovation.
Japanese and German manufacturersdidn't just fill this vacuum.
They redefined what a car should be.
And the post oil shock era,lighter, leaner and more reliable.
(12:26):
If the 1950s were the birthof American car culture,
then the 1960s were its adolescence,its teenage years.
then 1973 marked the sudden,jarring moment
when that carefree youth had to grow up.
I don't know if that's the best metaphor,
but I do like itbecause the oil crisis was a clear
(12:47):
dividing line between one eraof automobile and the next.
And the ripple effectsof what began that year
are still very much with us today.
Some examples are the rise of fueleconomy as a design principle.
This led to lighter materials, smallerengines, aerodynamic designs.
So it changed how cars look.
(13:10):
Now there are some ugly attemptsin the malaise area,
but these principles were starting offat that time.
There was also the creation of thecorporate average fuel economy standards.
These forced automakers to meet specific
fuel efficiency averagesacross their entire fleet.
And that's still in effect today.
Without that we might not have hybridsor turbocharged four cylinder engines.
(13:36):
There was
also a globalization of the car market.
The crisis gave international automakersthe opening they needed,
and they took it Toyota.
Honda, Volkswagen
and Nissan all became householdnames in America during this time.
Front wheel drive became more prominentbecause it offered better space efficiency
and fuel economy.
The foundation for the EV revolutionstarted in the 70s.
(13:59):
And lastly,there was a shift in consumer mindset,
which we've mentioneda couple of times today.
But this is the biggest change
This oil crisis permanently alteredhow consumers think about transportation,
and it taught an entire generationto ask questions like,
how far is thiscar going to get me on a gallon of gas?
Or how much is thiscar going to cost to own, not just to buy?
(14:23):
In my generation, that was bornright after this time period.
These are the first questions I ask whenbuying a car, and I know I'm not alone.
Lastly, I want to mentionthat some of the less reputable cars
in this era, the cars that were consideredquote unquote ugly when they came out
seemed to have a growing fan basethese days.
(14:44):
And we've seen this shiftas the generations
that grew up as children when these carswere on the road, have gotten older
because of the emotional connectionto these vehicles.
These people are nowcollectors themselves.
I've met many people over the yearsthat collect AMC,
Gremlins and FordPintos and others from the era.
Which goes to show you that there wasn'tjust an influence from this time period
(15:07):
on cars to today, but the cars of the time
are not going anywhere just yet.
Thank you for listening to fuelfor the future, presented by State Farm
Insurance and driven by America'sAutomotive Trust.
Learn more at America'sAutomotive trust.org. the.
The 1973 oil crisis
is a historical moment that reshapednot just the auto industry,
but the very foundation of modern energypolicy.
The long lines at gas stationsand rationing that followed were
a sudden cultural shockfor the Americans, accustomed
to cheap fuel and big cars.
(00:22):
Today we'll look at the economic shiftsand international tensions
that ignited a crisisthat would force the automotive industry
to rethink everything and discusssome of the cars
and design trendsthat came out of the era.
This is fuel for the future,presented by State Farm
Insurance and driven by America'sAutomotive Trust.
I'm Michael May.
(00:44):
There were many eventsthat led to the oil crisis
in 1973and the energy crisis later in 1979.
In the early 70s,the global oil market was under strain.
Demand for oilwas skyrocketing due to postwar
economic booms in the United States,Western Europe, and Japan.
America in particularwas at the height of the muscle car era.
(01:07):
Big engines, big cars and cheap gas.
but behind the scenes,some important events were in motion.
By the late 1960s.
US domestic oil production had peakedand were in decline.
Imports were steadily increasing,making the US more reliant on foreign
oil, particularly from the Middle East.
The country was vulnerable,but few in Washington or Detroit
(01:30):
wanted to acknowledge it.
And then in 1971, President RichardNixon took the US off the gold standard,
causing the dollar to devaluesince oil was priced in dollars.
Oil exporting countries foundthat they were earning less in real terms.
This planted early resentmentamong OPEC nations,
who were now motivated to raise pricesto offset the weaker dollar.
(01:52):
And both Libya and Iran beganaggressively negotiating higher
oil prices and exerting more controlover their natural resources.
And then there was a tipping point.
The Yom Kippur War.
Everything came to a headin October of 1973, when Egypt and Syria
launched a surprise attack on Israelduring the Jewish holiday.
(02:13):
The United States quicklybegan supplying arms and aid to Israel.
In response, the Organization of ArabPetroleum Exporting Countries,
which included Arab members of OPECplus Egypt and Syria,
declared an oil embargoagainst the United States,
the Netherlands, Portugaland South Africa.
The embargo slashed oil exportsby about 5 million barrels a day.
(02:38):
Prices skyrocketed for Americans.
The most visible consequences were longlines at gas stations and fuel rationing.
For a nation that had taken cheap fuel for
granted, this crisis hit hard.
Some key political actions were madeattempting to help, like the Emergency
Petroleum Allocation Act in 1973,which gave the federal government
(03:02):
authority to control, distributeand pricing of oil.
There was the national speed limitin 1974 of 55mph,
which was an effort to conserve fuel.
But these actions did not offerimmediate relief.
And the Iranian Revolution later inthe decade caused even more disturbance.
now, apologies for all the boring historylesson type stuff.
(03:25):
But these events had a lasting impacton automobiles.
In the monthsfollowing the 1973 oil embargo,
American consumers found themselvesreassessing not just their fuel budgets,
but their entire relationshipwith the automobile.
Instead of thinking about horsepower,big engines and big cars,
(03:45):
now the public was thinking about milesper gallon.
Some sports cars saw their horsepowercut in half,
and models made in this period,now called the malaise era.
Let's take a closerlook at how the auto world responded.
In the United States.
At General Motors.
(04:06):
At the time of this embargo,GM was the world's largest automaker.
It held around 45% of the UScar market and sold millions of vehicles
across its Chevrolet, Pontiac,Oldsmobile, Buick, and Cadillac divisions.
Ed Cole, GM's president, had overseenthe development of the Chevrolet Vega,
intended to be a compact,fuel efficient car.
(04:29):
The Vega featured
a lightweight engine and was hailedas a technological step forward,
but it was rushed into productionand there was poor quality control leading
to engine fires, rust issues, recalls,and the engine was rough and noisy.
On top of these mechanical issues,there was a strike at a plant in Ohio
that produced the Vega.
(04:50):
And production ended in 1977.
Then they attempted another importfighter, as they called
it, with the Chevrolet Chevette.
another compact and fuel efficient car,
Chevette approval came in December 1973,
with the car needing to be productionready by the fall of 1975.
(05:11):
Two soon for an all new design, Chevettecast iron inline belt driven single
overhead camshaft came in a standard 52horsepower 1.4l engine,
and it had an optional 60 horsepower1.6l version.
There was a four speed manual optionor a three speed automatic transmission in
(05:31):
GM estimated the Chevette to sell well.
But in 1976, larger carswere starting to hit the market again,
and Chevette was not very successful.
However, by the energy crisis of 1979,GM had a better understanding
and foundation to build uponto create compact cars for the market.
(05:52):
Meanwhile,at Ford, Ford was better positioned
thanks in part to Lee Iacocca,the visionary behind the Ford Mustang.
Under him, they released the Ford Pinto
in 1971 as a subcompactwith a price under $2,000,
explicitly designed to competewith Japanese imports.
Iacocca pushed for the Pintodespite internal resistance,
(06:14):
and it soldwell over 100,000 units in its first year.
But it would later face scandal oversafety concerns involving its gas tank.
Nevertheless, Iacocca'sinstinct to move toward smaller,
more economical vehicles proved prescient.
After being ousted from Ford in 1978,Iacocca would carry
those instincts to Chrysler,
(06:35):
where he played a central rolein the next phase of fuel efficiency.
More on that shortly.
At the Chrysler Corporation.
By 1973,they had become financially fragile
and heavily dependent on sales of largersedans.
Their initial response to the crisiswas rather weak.
(06:55):
And by the late 1970s,the company was near collapse.
When Lee Iacocca took over as ChryslerCEO in 1979,
he leveraged federal loan guaranteesand introduced the Car
platform Compact front wheel drive carslike the Dodge Aries
and the Plymouth Reliant.
These vehicles were more fuel efficient,affordable and crucially profitable.
(07:19):
The cars, combinedwith the introduction of the minivan,
helped save Chryslerand influenced others in the industry.
At American Motors Corporation, AMC,
the smallest of the Big Four,found themselves ahead of the curve.
They made some of the most forwardthinking moves during this time.
(07:41):
Where they were focused on smaller,more efficient models
like the Gremlin, the pacer, and laterthe spirit.
Though quirky in design, these carswere some of the first American vehicles
explicitly built for a futurewhere size and power.
Were less important than miles per gallon.
AMC also began early explorationof electric vehicles,
(08:04):
working with the US Postal Service to testbattery powered jeeps and delivery vans.
Decades ahead of the EV curve.
The American manufacturers are remembered
for being somewhat controversialduring this era.
A few other points of interestis that Ford replaced the Mustang
with the Ford Mustang two, a platformwhich in its first year
(08:28):
was 800 pounds lighterthan the previous generation of Mustangs.
It also had a 105 net horsepower,
which is abouthalf of the previous year's.
Some cars were redesigned to fit inentirely different automotive categories.
For example, the Mercury Cougarand the Dodge Charger
were transformed from muscle carsto luxury cars.
(08:51):
Chevy continued to offer its Chevelle,but they discontinued
the SS Performance Package in 1973.
While the AMC javelin,the Plymouth Barracuda, the Pontiac GTO,
those were all modelsthat were canceled entirely in 1974.
Ford's sales fell 47%
(09:12):
and Chrysler sales dropped 27%
from 1978 to 1982,
while at the same time import cars
saw an increase in sales.
And that brings us to probablythe most important aspect of this
era the growth of the import car.
(09:33):
Japan and Germany,for example, were seizing the moment.
While Detroit was
retooling its factories and philosophies.
Japanese and European automakershad dealt with high fuel prices
in the past and marketsthat had demand for compact cars.
They were ahead of the curve, so to speak.
(09:56):
And American buyers saw these importsas an answer to the oil crisis.
The Toyota Corolla was already gainingpopularity
in the US,but it became a star during this era.
It offered a 1.6l engine, excellent fuel
economy and, crucially, reliability. U.S.
consumers were initially skepticalof Japanese cars, but they were impressed
(10:19):
by how these vehicles held up over time.
Toyota had made it a priorityto penetrate the American market
by ensuring Toyota vehiclesmet US standards, while keeping
production costs low through the famedToyota Production System.
At Honda, which had been knownfor its motorcycles
(10:39):
before the 70s, had turned their spotlightto the Honda Civic,
which was introduced in 1972with its civic engine.
Honda had a massive edgein performance and cost.
The company was also deeply committedto precision
engineeringand the Civic's lightweight frame.
(11:00):
Impressive fuel economy over 40 miles
per gallon on the highway,and low emissions
made it not just a consumer success,but a regulatory darling.
and over at Volkswagen in Germany.
They had a long presence in the USwith the beetle.
But by 1974 they unveiled the VW rabbit,
(11:21):
known in Europe as the Golf,
which would becomeone of the most successful
compact cars in the world.
It's front wheel drive layout,modern hatchback design and impressive
fuel economy positioned itperfectly for the post-crisis market.
Rudolf Lighting,the chairman of VW at the time, pushed
hard to modernize the companywith its lineup, with the rabbit
(11:45):
as the flagship of a more fuel consciousfuture.
These imports put pressureon American companies at the time,
and it had a lasting impacton the entire industry.
The 1973 oil crisis didn't
just push the car industryto make more fuel efficient cars,
(12:05):
it forced them to rethinktheir very identity.
American companies
that had long rested on their laurelshad to pivot toward innovation.
Japanese and German manufacturersdidn't just fill this vacuum.
They redefined what a car should be.
And the post oil shock era,lighter, leaner and more reliable.
(12:26):
If the 1950s were the birthof American car culture,
then the 1960s were its adolescence,its teenage years.
then 1973 marked the sudden,jarring moment
when that carefree youth had to grow up.
I don't know if that's the best metaphor,
but I do like itbecause the oil crisis was a clear
(12:47):
dividing line between one eraof automobile and the next.
And the ripple effectsof what began that year
are still very much with us today.
Some examples are the rise of fueleconomy as a design principle.
This led to lighter materials, smallerengines, aerodynamic designs.
So it changed how cars look.
(13:10):
Now there are some ugly attemptsin the malaise area,
but these principles were starting offat that time.
There was also the creation of thecorporate average fuel economy standards.
These forced automakers to meet specific
fuel efficiency averagesacross their entire fleet.
And that's still in effect today.
Without that we might not have hybridsor turbocharged four cylinder engines.
(13:36):
There was
also a globalization of the car market.
The crisis gave international automakersthe opening they needed,
and they took it Toyota.
Honda, Volkswagen
and Nissan all became householdnames in America during this time.
Front wheel drive became more prominentbecause it offered better space efficiency
and fuel economy.
The foundation for the EV revolutionstarted in the 70s.
(13:59):
And lastly,there was a shift in consumer mindset,
which we've mentioneda couple of times today.
But this is the biggest change
This oil crisis permanently alteredhow consumers think about transportation,
and it taught an entire generationto ask questions like,
how far is thiscar going to get me on a gallon of gas?
Or how much is thiscar going to cost to own, not just to buy?
(14:23):
In my generation, that was bornright after this time period.
These are the first questions I ask whenbuying a car, and I know I'm not alone.
Lastly, I want to mentionthat some of the less reputable cars
in this era, the cars that were consideredquote unquote ugly when they came out
seemed to have a growing fan basethese days.
(14:44):
And we've seen this shiftas the generations
that grew up as children when these carswere on the road, have gotten older
because of the emotional connectionto these vehicles.
These people are nowcollectors themselves.
I've met many people over the yearsthat collect AMC,
Gremlins and FordPintos and others from the era.
Which goes to show you that there wasn'tjust an influence from this time period
(15:07):
on cars to today, but the cars of the time
are not going anywhere just yet.
Thank you for listening to fuelfor the future, presented by State Farm
Insurance and driven by America'sAutomotive Trust.
Learn more at America'sAutomotive trust.org. the.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com