Discussing fuel economy mandates and affordability

Discussing fuel economy mandates and affordability

Federal regulators, automakers and NADA are discussing the stringent federal fuel economy mandates in light of the low price of gas, the popularity of light trucks and the importance of consumer choice and affordability. Speaking at an automotive research conference in Traverse City, MI, EPA officials appeared happy with the current mandates, while auto industry representatives urged more flexibility.

Chris Grundler, director of air quality for EPA, said the auto industry has already made good progress on fuel economy goals and could continue to improve in the next 10 years, according to the Detroit Free Press. A draft technical assessment issued by the EPA and NHTSA in mid-July said that the fleetwide average is likely to be closer to 50.8 mpg by 2025 than the federal goal of 54.5, but showed no indication of backing down from previously set goals. The assessment is part of a mid-term review agreed upon when the standards were written in 2012.

NADA is urging regulators to look at vehicle affordability and how the regulations would affect vehicle pricing.

–The drastic upswing of the miles-per-gallon compliance curve from now until 2025 is going to have a dramatic effect on vehicle prices and not just on the most fuel-efficient vehicles in the fleet, but up and down the entire lineup,” said Wes Lutz, NADA Regulatory Affairs chairman. He estimated that the regulations could add $5,000 to the price of each new vehicle.

The average transaction price for a new vehicle is already more than $34,000 (see article on page 3). –Affordability is everything,” said Lutz. –We can design and build all the fuel-efficient cars and trucks we want, but real life fuel economy improvements canêt be achieved until consumers actually buy those new vehicles.”

Interested parties may submit comments on the technical report until mid-September. Regulators must decide by April 2017 whether to make changes in the standards.