A Case Study in Compliance and its Costs

How much has compliance cost us? What forms does it take? There are many examples that can help to quantify this but the best ones are perhaps direct comparisons – of the before and the after.

Case in point: The current (2026) Toyota Highlander vs the 2022 Highlander – which was the same Highlander as the current model, with one big difference. Literally. The 2022 iteration came standard with a much bigger engine. A V6 engine. Toyota’s well-regarded 3.5 liter V6 engine, which is the size and type of engine that used to be a given in a vehicle such as the Highlander, which is a 4,000-lb. mid-sized crossover – because a V6 that size was a size-appropriate engine for a vehicle that size (and weight).

Not to mention the price.

Well, 2022 was the last year the Highlander came standard with – or even offered – a V6. Come 2023, the only engine you could get in a Highlander was – and still is – a 2.4 liter, turbocharged four cylinder engine.

It is a compliance engine, nothing more – and also less. Specifically, it was a compliance measure for dealing with what Toyota expected to be new federal (EPA) fatwas pertaining to the “emissions” of carbon dioxide, which had been framed by the EPA as a pollutant via the so-called endangerment finding, recently kiboshed by Trump’s EPA. This “finding” provided the pretext for regulations requiring car companies to find ways to reduce CO2 “emissions” – eventually to nil – and unlike the actually polluting byproducts of burning gasoline that can be controlled by fine-tuning the burning and chemically (catalytically) treating the exhaust, there is no way to “clean up” CO2 “emissions,” because they are not dirty in the first place.

The only thing that can be done is to “emit” less CO2.

You can do that by burning less gas. And here comes the punchline. A smaller engine – such as a 2.4 liter four – burns less gas than a 3.5 liter V6 because the four has less cylinder volume; i.e., less air (and fuel) in – less gas out (the tailpipe).

This is the only reason the 2023-to-present Highlander has a 2.4 liter turbo four rather than the V6 it previously came standard with. It is certainly not because the 2.4 liter four gives buyers more for their money.

The 2.4 liter four makes less horsepower – even though it is turbo-boosted. Just 265 horsepower vs. 295 for the replaced 3.5 liter V6. That’s a loss of 30 horsepower. The little four does produce more torque (and sooner). This is the consolation prize handed to buyers who used to get a six for the same money.

For less, actually.

The 2022 Highlander with the V6 stickered for $35,855. The 2026 model – basically identical, other than the fact that it no longer comes with a V6 – lists for $45,570. Yes, there has been inflation over the past four (just barely) years. But that does not entirely account for the almost $10k uptick in price in just barely four years for essentially the same vehicle. The turbo four is a more expensive engine because it has more peripherals – such as the turbo and all the related plumbing. The engine is also direct injected (another compliance cost) rather than just fuel injected.

It is particularly interesting to observe that there is no gas mileage advantage.

The 2022 V6-powered Highlander rated 21 city, 29 highway. The 2026 iteration of the same vehicle – with aa turbo 2.4 liter four – touts 21 city, 28 highway. A meaningless difference. The buyer of the ’26 Highlander saves nothing at the pump, but pays more at the Toyota store. Also – probably – down the road, in the form of higher and sooner repair and replacement costs.

Toyota’s 3.5 liter V6 was one of those anvil engines that, if you just changed the oil regularly, could be relied upon to cost you very little else for 200,000-plus miles. But the little 2.4 liter turbo four is under much more pressure – literally, that’s what turbo boost is. Critical wear parts parts such as bearings and pistons rings are subjected to more force as well as heat and that generally translates into a shorter service life.

The buyer will also pay more for insurance, which is based upon the replacement cost of the vehicle. A vehicle such as the ’26 Highlander that costs almost $10k more than its 2022 counterpart will necessarily cost more to “cover,” so the buyer pays for that, too.

Arguably, Toyota pays as well. This diminishment for the sake of compliance is costing Toyota – costing every car company – something hard to quantify but of inestimable value:

The affection of customers.

People generally intuit when they’ve been gypped. They are being gypped – wholesale – on account of the effect of the pressure to comply. Six cylinder engines were – as recently as ten years ago – not just common engines but nice things that ordinary people of modest means got for not much money. V8 engines – an even nicer thing – were within their reach, too.

Look around today.

The six cylinder engine is on the cusp of being out of reach for all but the affluent and even they have been diminished by compliance. The V8 engines that were as common in six figure cars as six cylinder engines were common in $35k cars are now almost as uncommon as V12 engines and increasingly beyond the means of all but the very affluent.

This is what compliance has cost us.

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