NCPA - National Center for Policy Analysis

Final Rules Set On Car Mileage

August 31, 2012

Newly released final fuel-economy standards are set to bring the average mileage of cars and light trucks to 54.5 miles per gallon by 2025. But the Obama administration's new push for increasing fuel-economy standards may leave consumers having to pay more despite lower overall fuel costs, says the Wall Street Journal.

The new standards add fuel to the presidential elections as both sides try to carve out the facts of how the new fuel standards will affect the consumers and the economy.

  • The Obama administration says new vehicles will cost about $1,800 more by 2025.
  • According to Bill Underriner, chairman of the National Automobile Dealers Association, the standards may actually increase new car prices by $3,000.
  • This would shut out nearly 7 million people from the new car market.

While the Obama administration is quick to tout the environmental benefits of the plan and reduced dependence on foreign oil, they overlook some problems. Foremost, foreign automakers say the standards are strict on cars and less-strict on light trucks, which benefits American automakers since they make a lot of trucks. Not to mention that the United States still has part ownership of General Motors. Moreover, the savings in fuel would simply add to the upfront costs of getting new technology that consumers may not want.

Furthermore, the new fuel standard has been used in the presidential campaign as a means for the candidates to distinguish each other. Republicans assert that the standards prevent businesses from recovering in a weak economy. However, the Obama campaign argues that this would reduce U.S. oil consumption by more than two million barrels by 2025 and cut greenhouse gas emissions.

Source: "Final Rules Set On Car Mileage," Wall Street Journal, August 28, 2012.


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