U.S. completes 54.5 mpg fuel-economy mandate for light vehic

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U.S. completes 54.5 mpg fuel-economy mandate for light vehic

Postby kfxnando » Tue Aug 28, 2012 7:05 pm

WASHINGTON (Bloomberg) -- President Barack Obama released a final version of a rule forcing automakers to more than double average fuel economy by 2025 that includes changes benefiting Honda Motor Co. and other makers of alternative-fuel vehicles.

"By the middle of the next decade, our cars will get nearly 55 miles per gallon, almost double what they get today," Obama said today in an e-mailed statement. "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."

Corporate average fuel economy, or CAFE, rules released today and that took effect earlier this year are supposed to reduce U.S. oil consumption by 12 billion barrels and lead to fuel savings of more than $8,000 by 2025 over the life of a vehicle, the White House said.

Boosting average fuel economy is part of Obama's plan to reduce oil imports and use. Promoting purchases of more fuel-efficient vehicles can help reduce the use of fossil fuels.

The Environmental Protection Agency and National Highway Traffic Safety Administration released the proposed rule for model years 2017 to 2025 in November after reaching an agreement with automakers on the outline in July 2011. Auto executives from companies including General Motors Co., Ford Motor Co., Chrysler Group LLC and Hyundai Motor Co. stood with Obama at the Washington Convention Center to tout the agreement, which was the basis for the final rule.

The proposed rule granted incentives to plug-in electric and plug-in electric-hybrid vehicles, with the final rule adding natural-gas-powered cars to that list. Honda sells vehicles powered by natural gas.

Price tag: $192 billion

The 2025 rule and one that took effect this year and applies through 2016 could together cost as much as $192 billion, according to administration estimates. The administration has said the 2017-2025 rule would save as much as $515 billion in fuel spending as they add an average of $2,000 to the price of each new passenger vehicle by 2025.

The proposed rule required automakers to improve car fuel economy by an average of 5 percent annually and trucks' by 3.5 percent in most years.

Obama had delayed release of the final version from a self-imposed Aug. 15 deadline. The proposed rule was criticized by U.S. Rep. Darrell Issa, R-Calif., and foreign automakers as a sweetheart deal for U.S. automakers, especially GM and Chrysler Group LLC, which received government bailouts.

German automakers Daimler AG and Volkswagen AG didn't sign agreements, saying the plan gave an advantage to light trucks, primarily made by U.S. automakers. Honda, which signed the agreement, made similar assertions in e-mails that Issa's committee released earlier this month.

Consumers have been slower to embrace electric vehicles than automakers had hoped for, in spite of a $7,500 U.S. tax credit for buyers. Customers bought fewer GM Chevrolet Volts and Nissan Motor Co. Leafs than the automakers produced in 2011, the first year of U.S. sales of plug-in electric vehicles made by mass-market manufacturers.

Electrics, hybrids

Selling more hybrid and plug-in electric vehicles would help automakers meet CAFE targets. Toyota Motor Corp.’s Prius, the best-selling hybrid vehicle, sold 136,463 cars last year, accounting for 1.1 percent of light-vehicle sales in the U.S., according to the Bloomberg Government analysis.

Luxury automakers including Daimler and BMW will have a harder time complying with the rule than will full-line manufacturers that can balance gas guzzlers with fuel sippers, the analysis found.

Proponents of increasing fuel economy have complained about a provision that a Public Citizen official labeled "wiggle room" because it allows for a review of the rule in 2018 and adjustment of the mandate.

“We won’t kid ourselves about the automakers’ plans for compliance,” Tyson Slocum, director of the consumer-advocacy group’s energy program, said in an Aug. 23 statement. “We can be sure the industry will attempt to make a case that it is too expensive to meet the federal goal of 54.5 mpg. And you can be just as sure that we will be there, working to hold them to it.”

Jobs pledged

The Natural Resources Defense Council and BlueGreen Alliance say the rule could create as many as 570,000 jobs by boosting demand for new technologies.

Transportation Secretary Ray LaHood said on the conference call that the rule “may lead to new jobs,” declining to give an estimate.

The new standards give automakers flexibility in how to meet them and result in different improvement targets among automakers, a Bloomberg Government study found. While they will require fuel-economy increases, because of the way the rule is structured and credits it offers automakers, car buyers won’t see fuel-economy gains of that scope on window stickers.

The fuel component of the rule will require an average of 49.6 mpg for automakers’ fleets by 2025, while the corresponding carbon dioxide-emissions requirement will yield 54.5 mpg, according to Bloomberg Government.

Regulators can levy fines on automakers who don’t meet the requirements, which are based on vehicles that consumers buy rather than the fleet produced by the manufacturers.

Read more: http://www.autonews.com/article/2012082 ... z24rxV8FHj

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