WASHINGTON, D.C. -
When the Obama administration released finalized standards that will increase corporate average fuel economy to the equivalent of 54.5 miles per gallon for cars and light-duty trucks by model-year 2025, a dealer body leader and industry analysts again questioned the ramifications of what federal regulators want.
Bill Underriner, chairman of the National Automobile Dealers Association, reiterated the organization’s concerns moments after White House officials released the finalized plan Tuesday afternoon.
“America’s new-car dealers support continuous fuel-economy increases,” Underriner began. “NADA remains concerned that model-year 2017–2025 mandates, coupled with previous Obama administration fuel economy regulations, will hike the average price of a new vehicle by nearly $3,000 when fully implemented.
“This increase shuts almost 7 million people out of the new-car market entirely and prevents many millions more from being able to afford new vehicles that meet their needs,” the chairman projected. “If this rule suppresses new-vehicle sales, achieving the nation’s greenhouse gas and energy security goals will be needlessly delayed.
“Auto dealers will continue the important work of helping consumers meet their transportation needs despite being shackled by the cost increases under this rule,” Underriner pledged. “As this rule ignores the essential role that consumers play, Congress needs to continue to review these regulations to ensure that affordable vehicles are available to all Americans.”
Nevertheless, President Barack Obama continued to tout the benefits of his CAFE plan, a strategy he believes will nearly double the fuel efficiency of future vehicles compared to new models currently on the road.
In total, White House officials estimate this national program to improve fuel economy and reduce greenhouse gas emissions will save consumers more than $1.7 trillion at the gas pump and reduce U.S. oil consumption by 12 billion barrels.
“These fuel standards represent the single most important step we’ve ever taken to reduce our dependence on foreign oil,” Pres. Obama stated. “This historic agreement builds on the progress we’ve already made to save families money at the pump and cut our oil consumption.
“By the middle of the next decade our cars will get nearly 55 miles per gallon, almost double what they get today,” he continued. “It’ll strengthen our nation's energy security, it’s good for middle class families and it will help create an economy built to last.”
The standards issued Tuesday by the U.S. Department of Transportation and the U.S. Environmental Protection Agency build on the administration’s standards for cars and light trucks for model-years 2011–2016. Those standards raised average fuel efficiency by 2016 to the equivalent of 35.5 mpg.
NADA isn’t the only place where skepticism about Obama’s plan arose. Jeremy Anwyl is vice chairman of Edmunds.com.
“The CAFE standards that have been approved starting in 2017 risk pushing technological demands beyond the automakers’ ability to deliver,” Anwyl cautioned. “The smarter way to approach it is to let the market guide vehicle fuel-efficiency standards. Consumers have shown a willingness to buy fuel-efficient cars, but not at the expense of other features on their checklists like comfort, space and performance.
“CAFE risks requiring automakers to build vehicles and adopt technologies that consumers may not want to buy,” Anwyl cautioned.
Edmunds.com green car analyst John O’Dell also chimed in on the issue, adding, “The 54.5 mpg standard is far higher than the number that the vast majority of new-car buyers will see on window stickers in the 2025 model year. That's because CAFE is a government measuring stick that has not changed over the past 33 years, and does not reflect the EPA window sticker number that consumers have come to expect from their vehicles.
“So, the ‘real’ average fuel economy figure for the 2025 model-year will be an EPA window sticker number that’s closer to 36 mpg,” O’Dell calculated.
Despites those assessments, leaders from the Consumer Federation of America cheered Tuesday’s CAFE announcement. Mark Cooper serves as director of research.
“This is not only a big win for consumers, it is vital to the U.S. auto industry and the single most important thing we can do to end America’s addiction to oil — something President George W. Bush called ‘a serious problem’ — and to improve our national energy security,” Cooper insisted.
“The many benefits of this policy are so clear that is has garnered widespread support from the public, automakers, auto workers, national security experts, public health advocates and environmentalists,” Cooper continued.
Jack Gillis, the CFA’s director of public policy also reacted to the announcement, stating, “Having spent a record $2,850 on gasoline last year, the average American household today simply cannot afford to invest in a gas-guzzler. The best way to insulate American families from volatile gasoline prices is to create a passenger vehicle fleet that gets more miles to the gallon. The new 54.5-mpg standard will deliver the cars, trucks and SUVs that consumers can afford and will love to drive.
“The number of passenger cars and trucks getting over 30 mpg has more than quadrupled in the past five years, increasing from 12 models to 52,” Gillis continued. “It is no coincidence that we have just started to see vast improvements in fuel economy after years of stagnation. Automakers knew that these higher standards were coming and they have responded by putting out a better, more efficient, more cost-effective product.
“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,” he went on to say.
Finally, the Association of Global Automakers said on Tuesday that its members are working hard and will continue to take the steps needed to meet the administration’s CAFE standard of 54.5 mpg by 2025.
“The new standard is aggressive and sets a high bar for automakers,” said Mike Stanton, president and chief executive officer of Global Automakers, which represents all of the major domestic and foreign OEMs. “This program is important to our country and our members have accepted the challenge.
“The new rule extends very far into the future,” Stanton pointed out. “No one knows exactly where the industry or marketplace will be by 2025. Consequently, we are pleased that the final rule includes a mid-term review process to evaluate how the program is working and to more closely examine the reality of reaching the 54.5 mpg goal.”
Stanton went on to say Global Automakers’ members are aggressively pursuing innovative ways to reduce carbon-dioxide emissions and lessen the nation’s reliance on fossil fuels. Member companies are investing in advanced technology vehicles powered by hydrogen fuel cells, clean diesel, electricity, sustainable biofuels and natural gas.
“The one national fuel economy program streamlines the regulatory processes and allows automakers to efficiently work toward meeting the nation’s environmental and energy objectives,” Stanton said. “The program also provides our members with the needed flexibility and lead-time to design and build a full range of advanced technology vehicles that consumers will want to buy.”