The Obama Administration announced today that it has finalized a fuel economy standard that calls for automakers to meet a 54.5 mile-per-gallon average by the year 2025.
"By the middle of the next decade our cars will get nearly 55 miles per gallon, almost double what they get today," President Obama said in a statement released on the National Highway Traffic Safety Administration Website. "It'll strengthen our nation's energy security, it's good for middle class families and will help create an economy built to last."
The new standard will call on automotive engineers to design cars that essentially double their fuel efficiency in the next 13 years. Lawmakers had previously passed regulations that would push automakers to boost their corporate average fuel economy (CAFE) ratings to 35.5 mpg by 2016. The new regulation will give them nine more years to raise it an additional 19 mpg.
Automakers are expected to meet the new standard with a combination of technologies that include lightweight materials, smaller vehicle sizes, new transmissions, and more efficient engines, as well as hybrid and electric vehicle technology.
Some consumer groups praised the announcement. "The 54.5-mpg standard is a win for both consumers and automakers because it creates a clear pathway for automakers to meet the needs of consumers today and in the coming years," said Jack Gillis, director of public policy for the Consumer Federation of America, in a press release.
Prior to today's announcement, automakers and automotive experts had expressed concern that the 54.5-mpg standard would hurt automotive businesses and weaken vehicle crashworthiness. In an interview two weeks ago, automotive Sandy Munro, CEO of Munro & Associates, told Design News that "hitting 54.5 miles per gallon is possible but it comes at a price. It goes back to whether the general public is willing to put up the cash."
Last year, The Center for Automotive Research predicted that an aggressive new standard would reduce vehicle sales by two million units and cause an employment drop of 1.69 million jobs. The organization said that the higher prices of such cars would cause consumers to hang onto their existing vehicles longer. David Cole, chairman emeritus of CAR, called the phenomenon the "Cuban-ization" of the American auto market, in reference to the workings of the Cuban auto market.
The US House of Representative's House Oversight and Government Reforms Committee has also fought the measure. An August 10 report from the committee suggested the new standard would cause substantial and unrecoverable costs. "This places ideology over science and politics over process," the authors of the report wrote. "This action has serious consequences for consumers in the choice, cost, and safety of vehicles."
Regardless of any particular political agenda, the US populous is "spoiled" with cheap gasoline. The true cost, as noted below, amounts to about twice the current average price. The domestic (North American) supply of oil has been increasing over the last four years and the demand has fallen - yet the price increases. People complain loudly and the government uses the only means it has available (rules and regulations) to respond. It's an imperfect system - but it does have the affect of focusing development effort. I fully expect that this is too ambitious a goal and the government will eventually have to backpedal, but we will ultimately end up with cars that make more efficient use of a gallon of gasoline.
I think that's good news, Chuck. Last time around, the truck exclusion allowed the auto industry to shift its emphasis to getting people into minivans, SUVs and trucks -- all of which consumed more gas than cars even before the CAFE standard. What we've had since then is large vehicles that spend most of their time carting around single drivers.
I should add, Rob, that the vehicles which actually ARE trucks -- for example, the Chevy Silverado pickup -- will have to get 44% better mileage than today. So they will go from 18 to 26 mpg. That's less than the cars, which will need to be bumped up by 70%.
It will be interesting to see what is considered a truck and what is considered a car, Chuck. Many of the SUVs are as large or larger than trucks. Either way, the mileage will certainly improve. I wonder if the CAFE standards would get repealed in a Romney administration. They probably would. Isn't that what happened last time?
I don't know if the new CAFE would get repealed under Romney, Rob, but I can say that there's a chance of it being dropped in 2018, no matter who the president is. The automakers supported this rule for two reasons: First, they knew they would have to deal with a separate set of similar laws in states like California, Massachusetts and New York. Second, they wouldn't have supported this rule if it didn't have an escape hatch, or "review period." The review period comes in 2018. If automakers can prove then that it will cost far more than was expected, they may be able to convince lawmakers to soften it or drop it.
I didn't realize there was an escape hatch, Chuck. Even so, I would guess there will be plenty of innovation to come out of this standard, whether the carmakers are able to hit the target or not.
Excuse my comment from here in good old England, but the rest of the world already gets much better mpg in real life, plus better performing cars, so why is the US lagging behind?
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