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Will Fuel Economy Rules Cost 1.1 mil Jobs – or Save Consumers Billions?

Debate continues as EPA moves forward with mid-term CAFE Review.

by on Sep.22, 2016

Sean McAlinden, lead author of a new study from the Center for Automotive Research, believes the current 2025 CAFE target will harm the auto industry.

If you think the presidential debate has kicked off some angry debate, that’s nothing compared to the furor generated by the mid-term review of the tough Corporate Average Fuel Economy, or CAFE, standards set to phase in between now and 2025.

In fact, some players will get their chance today to express their frustrations – or support – about the looming new standards during the House Energy and Commerce committees midterm review hearing. According to one study, hitting the 54.5 mile per gallon target would cost the country 1.1 million automotive jobs and saddle consumers with significantly higher costs for new vehicles. CAFE proponents, however, dismiss such claims as alarmist and conclude that, if anything, more jobs will be generated while consumers could save billions of dollars on fuel costs.

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Who is right? Federal regulators have so far been leaning towards maintaining the targets announced during the first term of the Obama Administration. But it is a definite possibility that the next president could wind up having the final say. (more…)

Battle Lines Drawn in Fuel-Economy Showdown

Feds cut off public comment on new CAFE standards over automaker protests.

by on Aug.24, 2016

Automakers are unhappy that federal regulators declined to extend the public comment period about tougher fuel economy standards.

The U.S. Environmental Protection Agency and the National Highway Transportation Safety Administration have decided to cut off public comment on the federal fuel-efficiency regulations and denied a request by automakers to extend the comment period.

The decision sets up a showdown between federal regulators and automakers that argue the current regulations are too stringent given the prevailing drop in fuel prices and the shift in consumer demand towards larger, less fuel-efficient vehicles, such as trucks and sport utility vehicles.

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In a report released last month, EPA and NHTSA said that automakers have the technology to meet aggressive mandates to hike fuel efficiency, but fleet-wide improvement will not be as great as the Obama administration once forecast because buyers are switching to pickup trucks and SUVs. (more…)

Americans Favor Tougher Fuel Economy Standards

New poll shows 79% favor tougher regulations for automakers.

by on Aug.05, 2016

President Barack Obama toughened fuel economy standards in 2012 to their current federally mandated level of 54.5 mpg by 2025.

A new poll by the Natural Resources Defense Council indicates that more than three quarters of Americans believe the federal government should raise fuel economy standards for automakers.

Arguments over the fuel economy standards have raged ever since the Arab Oil Embargo of 1973, but the debate has taken on a sharper edge this year since Environmental Protection Agency is required to conduct a review of the current goal of 54.5 mpg by 2025.

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Federal regulators said U.S. automakers will likely miss the goal, which was established by President Barack Obama’s administration in 2012. The administration raised the goal from 27.5 mpg to the current standard of 54.5 mpg during its eight years in office. (more…)

U.S. Regulators Open Door to Rolling Back Aggressive CAFE Mileage Standards

Initial report says cheap fuel has shifted consumer buying patterns.

by on Jul.18, 2016

Sales of trucks are on the rise to due cheap gas prices, which may impact future fuel economy mandates.

Federal regulators have opened the door to rolling back the aggressive fuel economy standards set to go into effect by 2025, acknowledging that cheap gas has drastically shifted the type of vehicles that American motorists are buying.

The new report indicates a target of somewhere between 50 and 52.6 miles per gallon is more realistic than the original, 54.5 mpg goal, according to the new study. The first step in what will likely be a two-year “mid-term” review of the Corporate Average Fuel Economy, or CAFE, standards, the study was jointly produced by the Environmental Protection Agency and the National Highway Traffic Safety Administration.

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“Compliance isn’t based on what we build, but what consumers buy,” said Gloria Begquist, vice president of the Automotive Alliance, an industry trade group based in Washington, D.C. As things now stand, she stressed, “It’s going to be very difficult” to meet the original target. (more…)

Cheap Gas, Strong Truck Sales Could Force Review of EPA Mileage Mandate

But “mid-term” review of 2025 standard could come too late for change.

by on Jan.14, 2016

Even in the luxury market, SUVs like the new Cadillac XT5 are gaining market share.

Booming sales of pickups, SUVs and other light trucks may be fueling a surge in auto industry profits, but the shift is also creating at least one potentially serious problem, making it more difficult for manufacturers to meet increase tough U.S. fuel economy standards.

That is fueling industry interest in the planned “mid-term review” of upcoming Corporate Average Fuel Economy, or CAFE, standards set to reach an average 54.5 mpg by 2025. Scheduled to occur in 2017, the Environmental Protection Agency, which oversees mileage mandates, could be pressed to roll back the target to reflect shifting market demand – or a lack of the technology needed to get to 54.5 mpg.

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“We’re still making great strides in fuel economy,” Joe Hinrichs, Ford President of the Americas, told But that may not be enough to offset shifting market realities, especially with the unexpected collapse of fuel prices, Hinrichs said.


Makers Still Focusing on Lighter Materials, Better Engines to Meet CAFE

Survey shows new transmissions, electrification getting looks too.

by on Aug.06, 2015

Automakers are still focused on using lighter materials and more efficient engines to meet stringent fuel economy standards coming in 2025.

Broader use of lightweight materials, such as aluminum, and ever more efficient new engines top the list of strategies the auto industry is using to meet 2025 Corporate Average Fuel Economy or CAFE standard of 54.5 mpg, according the annual Wards Auto survey of engineers from both automakers and major suppliers.

The study, sponsored by DuPont Automotive, also shows that carmakers and suppliers are taking a hard look at a variety of technologies as the mid-term review deadline looms. Interest in diesel engines, fuel cell and even bio-fuels all increased in this year’s survey.

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However, transmission technologies, new to this year’s survey, and electrification form the second tier of strategies, according to the nearly 900 respondents in the automotive design and engineering community.  (more…)

New Car Buyers Pushing for Better Fuel Economy

Report shows federal mandate, consumer demand drives improvement.

by on Jun.23, 2014

Trucks are hot sellers these days, in some measure because they are getting better gas mileage than ever.

With new cars and trucks getting better gas mileage than ever and new vehicle sales hitting record highs, it’s no surprise that consumers expect their new purchases to continue to be more fuel efficient.

The Consumer Federation of America (CFA) released the results of its annual report today, which found that new vehicles are not only more economical, but also consumers are in favor of the fuel-efficiency rules helping to usher these vehicles to the market.

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“Consumers want and expect the vehicles they intend to purchase to get significantly higher fuel economy,” said Mark Cooper, CFA’s director of research. “Many Americans struggle to live within their budgets, and a large majority are troubled about future gasoline prices.” (more…)

Proposed 54.5 MPG Standard Wins Support of Labor, Consumer Groups

Consumers should save money from Day One, advocates insist.

by on Jan.17, 2012

The proposed 54.5 mpg rule could create 100,000 new jobs, according to UAW Pres. Bob King.

The United Auto Workers is out to mend its once-robust ties to the environmental movement.

In the past, the union had opposed raising fuel economy standards because it feared higher standards for trucks could lead to the elimination of jobs. During much of the last three decades, the union had been persuaded that changing the fuel-economy standards would weaken the domestic carmakers’ tight grip on the US truck market.

The union reversed its position in 2009 under pressure from the Obama administration, which was in the midst of bailing General Motors and Chrysler.  But this time the union voluntarily teamed up with various environmental groups to support new standards that will boost federal fuel-economy standards.

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UAW President Bob King said Tuesday that he is convinced the new standards, which will raise fuel standards for automaker to 54.5 miles per gallon by 2025, will help create new jobs in the U.S. by promoting new technology.

“The proposed rules are sensible, achievable, and needed,” King said, adding “the incremental increase in the price of a vehicle will covered by the money consumes will save by using less fuel,” added King, who cited UAW legend Walter Reuther’s dictum that it not only wanted clean factories, it also wanted clean lakes.

King also said in the past the union has to reestablish its ties to groups in the environmental movement to bolster its overall position in American society.

“They are good for the auto industry and its workers, good for the broader economy, good for the environment and good for our national security,” said King. “The drive to bring innovative fuel-saving technologies to market is transforming the auto industry in the United States and creating good jobs from the research lab to the factory floor.”

King said proposed standards to increase fuel economy and reduce tailpipe emissions have broad economic and social benefits and enjoy wide public support – a position echoed by environmental leaders during testimony in Detroit.

The proposed rules also take into account the importance of specialized vehicles such as big up trucks, which are vital to domestic manufacturers.

King joined several environmental, industry, educational and citizen groups to testify before the U.S. Environmental Protection Administration and the National Highway Traffic Safety Administration about new standards proposed by the Obama administration.

“With these rules in place, there’s a much smaller chance you’ll see ugly pictures of beautiful birds covered in petroleum,” said Larry Schweiger, CEO of the National Wildlife Federation.

“We’ll reduce greenhouse gas pollution by 2 billion tons, and cut our consumption of oil by 3.4 million barrels a day. That will reduce the need for risky drilling in fragile habitats,” Schweiger said.

David Foster, Executive Director of the BlueGreen Alliance, a partnership between U.S. labor unions and environmental organizations, said: “These standards are moving America to a clean energy economy that creates good jobs that are also good for our environment.

“2012 is expected to be the third straight year of double-digit auto sales growth for the US, with many consumers upgrading their older vehicles for cleaner cars now available on the market. The 54.5 miles per gallon standard will continue to fuel that comeback for years to come,” said Foster.

The Detroit hearings brought out some dissenting opinions from the likes of Don Chalmers, a New Mexico Ford dealer who served as a representative for the National Automobile Dealers Association.  He cautioned that federal regulators avoid “rushing headlong” into new rules that could have unintended consequences.

On a financial front, Chalmers argued that the new CAFE rules will bump monthly payments up by $60 to $70 a month and, perhaps more concerning, result in vehicles that buyers won’t want.

“If the customers don’t want to buy these products, we all lose,” he cautioned.

The proposed rules, which will modify standards already set to rise to 37.5 mpg by 2016, have caused a split within the auto industry itself.  General Motors, Toyota and Hyundai are supporting the change, the Korean maker’s U.S. CEO John Krafcik telling, “Of course, we’re positive on it.”  But several makers, including Volkswagen and Daimler, have refused to lend their support.

Paul A. Eisenstein contributed to this report.