In a move that is being heralded by environmentalists and automakers alike, the Obama administration announced on Aug. 28, 2012 that new fuel-efficiency standards will require the U.S. auto fleet to average 54.5 miles per gallon by 2025. The standards also regulate carbon dioxide emissions, which allow 144 grams per mile for passenger cars and 203 grams per mile for trucks.
Surprisingly, American automakers are largely supportive of these new regulations. Greg Martin, General Motors’ executive director for communications, is quoted as saying: “Customers want higher fuel efficiency in their cars and trucks, and GM is going to give it to them. We expect the rules to be tough, but we have a strong history of innovation, and we’ll do our best to meet them.”
The Auto Alliance – a group consisting of Ford, GM, Chrysler, BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota and Volvo – made a similarly supportive statement: “The Auto Alliance has called for a single, national program because conflicting requirements from several regulatory bodies raise costs, ultimately taking money out of consumers’ pockets and hurting sales. We want to get more fuel-efficient autos on our roads, and a single, national program with a strong midterm review helps us get closer to that shared goal.”
The regulations are also a smart move for the economy. With more fuel-efficient vehicles expected to cut down American oil consumption by 700 million barrels per year, and save consumers roughly $8000 over the life of their vehicles by 2025, the savings equate to lowering the price of gas by $1.
Unsurprisingly, environmentalists are pleased the new standards. Between 2011 and 2025, greenhouse gas emissions will be reduced by roughly 6 billion tons; this plan is celebrated by President Obama as the most important step taken by the United States to reduce consumption of foreign oil.
Not everyone is on board with the EPA’s decision though. The technology required to meet the standards will add an estimated $3,000 to the cost of a new vehicle. Bill Underinner, chair of the National Automobile Dealers Association, commented: “This increase shuts almost 7 million people out of the new-car market entirely and prevents many millions more from being able to afford vehicles that meet their needs.”
Republicans in the House of Representatives worry that the new standards will force consumers into smaller, less safe automobiles. Republican presidential candidate Mitt Romney announced that he would overturn the new standards if elected.
According to Edmunds.com senior analyst Jessica Caldwell, consumers should be aware that due to different methods of calculating mileage used by the EPA, window stickers at auto dealers will likely show around 36 mpg rather than 54.5.
If these regulations work as intended, consumers will be saving money and breathing cleaner air in just a couple of decades.