Mileage Rule May Impact Car Prices
AF News Desk
11-17-2011, 12:45 PM
Much of the talk surrounding a specific miles per gallon requirement for new cars has been regarding the desired area of around 35mpg.
However, with a rule proposed requiring a miles per gallon rating of 54.5 by 2025, attention has shifted to what the impact will be on the costs passed on to consumers.
The verdict? Approximately $2,000 per new car.
The story from Auto News (http://www.autonews.com/apps/pbcs.dll/article?AID=/20111116/OEM05/111119915/1179):
http://www.itrsport.com/images/itr_fuel_economy.jpg
Photo not associated with story
U.S. 54.5 mpg rule may add $2,000 to car prices by 2025
NADA objects to proposal
A proposed U.S. rule requiring automakers to double average fuel economy of vehicles to 54.5 miles per gallon by 2025 would add an average of $2,000 to the price of each passenger vehicle sold, two agencies said.
The National Highway Traffic Safety Administration and Environmental Protection Agency made the projection in posting the proposal today on NHTSA's Web site. Benefits of $419 billion to $515 billion would offset $157 billion in costs, the highway agency wrote.
The draft detailed a proposal agreed to in July by President Barack Obama's administration and automakers including Ford Motor Co., Honda Motor Co., Toyota Motor Corp. and General Motors Co. to take effect in 2017.
Daimler AG and Volkswagen AG were among automakers that didn't sign on and weren't part of a ceremony in Washington where Obama touted the rule as part of his plan to reduce the use of imported oil in the United States.
The proposed rule requires annual fuel-economy increases of 5 percent for cars. Light trucks such as pickups and SUVs can raise fuel economy at 3.5 percent for the first five years the rule will be in effect. Then, unless regulators decide differently in a midterm review, trucks also would have to boost fuel economy by 5 percent a year.
"The proposed regulations present aggressive targets, and the administration must consider that technology break-throughs will be required and consumers will need to buy our most energy- efficient technologies in very large numbers to meet the goals," Mitch Bainwol, CEO of the Alliance of Automobile Manufacturers, said in an e-mailed statement.
NADA objects
The National Automobile Dealers Association objected to today's announcement.
"America's auto dealers support continuous improvement in the fuel economy of the fleet of vehicles that drive on the nation's roads," the association said in a statement. "To this end, we are concerned that adding about $3,000 to the average cost of a car will price millions of Americans out of the market, which could reduce fleet turnover and delay environmental gains."
Representative Darrell Issa, a California Republican, opened an investigation into how it was written, saying it was rushed and may jeopardize safety by reducing the weight of vehicles on the road.
California, which has the authority to write its own air- quality regulations, plans to issue its own rule, the White House said today in an e-mailed statement.
By 2025, U.S. fuel-economy standards and other fuel- efficiency moves will save 12 billion barrels of oil; reduce oil consumption by 2.2 million barrels a day, about one-fourth of the oil the country imports; and save consumers more than $8,000 a vehicle in fuel costs, the White House said in a statement today.
House letter
Representative Ed Markey, a Massachusetts Democrat, and 107 other U.S. House members yesterday sent a letter to Obama supporting the rule.
"We believe that these standards to reduce petroleum use in cars and light trucks represent an opportunity to increase our national and economic security in an unprecedented way by dramatically decreasing our dependence on foreign sources of petroleum," they wrote.
A proposed rule had been due Sept. 30 before regulators said they needed more time. The final rule is scheduled to be published next year.
A separate rule issued in 2009, which takes effect next year, requires automakers to increase average fuel economy to 35.5 mpg by 2016.
[ [ [ [ [ [ [ [ [ OUR VIEW ] ] ] ] ] ] ] ] ]
This puts a lot of people in a tricky situation, if you ask me.
First, you have the NADA, who are already trying to comply (albeit reluctantly) with the restrictions being set in front of them for the current mpg requirements (http://news.consumerreports.org/cars/2009/09/cafe-obama-unveils-35-mpg-requirement-at-gm-factory.html). Now they're being cornered into working on an additional - and significantly larger - requirement that threatens to affect their overall sales goals as well.
Then you have the consumers, who are already finding it difficult to justify making used - let alone new - car purchases in a difficult economic climate.
I don't necessarily disagree with the idea that cars need to get better fuel economy, but I also don't necessarily agree with the tactic of getting there at the expense of the automotive market itself.
This may be one of those "get it done - dirty if necessary" situations that really has no winner right away.
However, with a rule proposed requiring a miles per gallon rating of 54.5 by 2025, attention has shifted to what the impact will be on the costs passed on to consumers.
The verdict? Approximately $2,000 per new car.
The story from Auto News (http://www.autonews.com/apps/pbcs.dll/article?AID=/20111116/OEM05/111119915/1179):
http://www.itrsport.com/images/itr_fuel_economy.jpg
Photo not associated with story
U.S. 54.5 mpg rule may add $2,000 to car prices by 2025
NADA objects to proposal
A proposed U.S. rule requiring automakers to double average fuel economy of vehicles to 54.5 miles per gallon by 2025 would add an average of $2,000 to the price of each passenger vehicle sold, two agencies said.
The National Highway Traffic Safety Administration and Environmental Protection Agency made the projection in posting the proposal today on NHTSA's Web site. Benefits of $419 billion to $515 billion would offset $157 billion in costs, the highway agency wrote.
The draft detailed a proposal agreed to in July by President Barack Obama's administration and automakers including Ford Motor Co., Honda Motor Co., Toyota Motor Corp. and General Motors Co. to take effect in 2017.
Daimler AG and Volkswagen AG were among automakers that didn't sign on and weren't part of a ceremony in Washington where Obama touted the rule as part of his plan to reduce the use of imported oil in the United States.
The proposed rule requires annual fuel-economy increases of 5 percent for cars. Light trucks such as pickups and SUVs can raise fuel economy at 3.5 percent for the first five years the rule will be in effect. Then, unless regulators decide differently in a midterm review, trucks also would have to boost fuel economy by 5 percent a year.
"The proposed regulations present aggressive targets, and the administration must consider that technology break-throughs will be required and consumers will need to buy our most energy- efficient technologies in very large numbers to meet the goals," Mitch Bainwol, CEO of the Alliance of Automobile Manufacturers, said in an e-mailed statement.
NADA objects
The National Automobile Dealers Association objected to today's announcement.
"America's auto dealers support continuous improvement in the fuel economy of the fleet of vehicles that drive on the nation's roads," the association said in a statement. "To this end, we are concerned that adding about $3,000 to the average cost of a car will price millions of Americans out of the market, which could reduce fleet turnover and delay environmental gains."
Representative Darrell Issa, a California Republican, opened an investigation into how it was written, saying it was rushed and may jeopardize safety by reducing the weight of vehicles on the road.
California, which has the authority to write its own air- quality regulations, plans to issue its own rule, the White House said today in an e-mailed statement.
By 2025, U.S. fuel-economy standards and other fuel- efficiency moves will save 12 billion barrels of oil; reduce oil consumption by 2.2 million barrels a day, about one-fourth of the oil the country imports; and save consumers more than $8,000 a vehicle in fuel costs, the White House said in a statement today.
House letter
Representative Ed Markey, a Massachusetts Democrat, and 107 other U.S. House members yesterday sent a letter to Obama supporting the rule.
"We believe that these standards to reduce petroleum use in cars and light trucks represent an opportunity to increase our national and economic security in an unprecedented way by dramatically decreasing our dependence on foreign sources of petroleum," they wrote.
A proposed rule had been due Sept. 30 before regulators said they needed more time. The final rule is scheduled to be published next year.
A separate rule issued in 2009, which takes effect next year, requires automakers to increase average fuel economy to 35.5 mpg by 2016.
[ [ [ [ [ [ [ [ [ OUR VIEW ] ] ] ] ] ] ] ] ]
This puts a lot of people in a tricky situation, if you ask me.
First, you have the NADA, who are already trying to comply (albeit reluctantly) with the restrictions being set in front of them for the current mpg requirements (http://news.consumerreports.org/cars/2009/09/cafe-obama-unveils-35-mpg-requirement-at-gm-factory.html). Now they're being cornered into working on an additional - and significantly larger - requirement that threatens to affect their overall sales goals as well.
Then you have the consumers, who are already finding it difficult to justify making used - let alone new - car purchases in a difficult economic climate.
I don't necessarily disagree with the idea that cars need to get better fuel economy, but I also don't necessarily agree with the tactic of getting there at the expense of the automotive market itself.
This may be one of those "get it done - dirty if necessary" situations that really has no winner right away.
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