Government Passes New Fuel Economy Standards
Apr. 02, 2010 10:04 a.m.
The National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) announced new federal fuel economy standards yesterday that require fleets to average 35.5 miles per gallon by 2016. The Corporate Average Fuel Economy (CAFE) requirements will cover 2012 through 2016 model-year vehicles.
Autoblog explains, “The overall fleet fuel mileage requirement will be an average between both passenger cars and light trucks, and NHTSA is predicting that the 2012 numbers will be 33.3 for cars and 25.4 for trucks in 2012, rising to 37.8 for cars and 28.8 for trucks by 2016. As before, credits will be dished out for vehicles that can run on E85 (ethanol), though automakers will need to prove their cars are running on the alcohol fuel by 2015 to continue earning those credits.”
Automakers are praising the new CAFE rules because they set a single national standard. Previously, states such as California were held to different standards than others.
“The requirements for the 2012-2016 model years pleased environmentalists who have criticized sluggish efforts by previous administrations to boost fuel efficiency,” writes MSN. “They also were welcomed by automakers who have been seeking a single standard after California and a dozen states tried to create their own rules.”
However, while automakers may be pleased, auto dealers aren’t. Because of the extra costs automakers will incur to meet the new standards, prices on cars are expected to increase.
Left Lane News reports, “The new standards will cost automakers over $50 billion during the same period [2012 through 2016].”
Once those expenses are passed on to car buyers, they are expected to increase prices on each vehicle $434 by 2012 and $985 by 2016. This could make it more difficult for dealerships to sell vehicles.
According to MSN, “Ed Tonkin, a Portland, Ore., car dealer who chairs the National Automobile Dealers Association, said the rules were the ‘most expensive fuel economy mandates in history’ and would turn many new cars and trucks into luxury items for consumers.
However, several sources say buyers will save more in the long run due to the more efficient vehicles. According to Autoblog, “Savings, though, are expected to be even greater,
with the average consumer will net an extra $3,000 in their wallets per in fuel savings over the life of the vehicle.”
LINK:
Government Passes New Fuel Economy Standards - U.S. News Rankings and Reviews
Linear Mode
