NCPA - National Center for Policy Analysis

Administration Looks to Increase Fuel Economy Standards

June 29, 2011

The Obama administration may require automakers to roughly double the average fuel economy of their car and light truck fleets from current levels to 56.2 miles per gallon (mpg) by 2025.  White House officials outlined the plan to auto industry officials last week, setting off a fight among automakers, environmentalists and others, says the Wall Street Journal.

  • Carmakers say the proposal would effectively require most new vehicles sold in the United States to be battery-powered by 2025 and raise prices by thousands of dollars.
  • Makers of electric vehicle technology say declining costs for lithium batteries will allow the auto industry to make big gains in fuel efficiency without stoking sticker shock.
  • The new plan would build on the administration's new rules put in place last year that require new cars and light trucks sold in the United States to average 35.5 mpg by 2016, up from 27.3 mpg today.
  • Government officials have estimated the costs of the new standards would add between $770 and $3,500 to a new car in 2025.

U.S. automakers have boosted the fuel efficiency of their fleets by more than 70 percent since 1975, when Congress first enacted corporate average fuel economy (CAFE) standards, even as they increased average horsepower.  But some car companies say planned improvements over the next five years are slated to meet fuel economy requirements already in place.

A 56.2 miles per gallon requirement is feasible, say supporters, in part because automakers have long been allowed to sell cars with a fuel efficiency lower than the government standards; credits, for example, are given for such features as air conditioning.

Also, cars on the road can be much less efficient than the computer simulations that determine the official fuel rating, environmental groups say.

Source: Josh Mitchell and Sharon Terlep, "Your Mileage May Vary," Wall Street Journal, June 27, 2011.

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