Federal midterm report on fuel economy out this month

Federal midterm report on fuel economy out this month

Automakers are awaiting the draft federal midterm report on fuel economy targets expected to be released this month. The Alliance of Automobile Manufacturers issued a report in late June saying that the stringent standards were no longer appropriate with the price of fuel as low as it is. (Click here for yesterdayês WANADA Bulletin.)

The draft report will be jointly issued by the EPA, NHTSA and CARB. In the 2015 and 2016 SAE Government/Industry Meetings at The Washington Auto Show, officials from all three agencies said they did not expect the CAFE standards to change. They and other proponents of the fuel economy targets point out that fuel prices have been volatile for many years and will not stay low forever.

CAFE backers say that automakers have successfully met the targets so far. But the requirements ramp up more quickly from 2018 to 2025, when the fleetwide target of 54.5 mpg kicks in about 40 mpg when automaker credits and adjustments are factored in.

The Auto Alliance report cites surveys showing that fuel economy is a low priority for most car buyers. Most consumers are more interested in vehicle price and reliability. When gas is $2 a gallon, it takes consumers up to eight years to recoup just $1,800 extra that they spend to buy a more fuel-efficient vehicle, the report says. Most car owners donêt even keep their vehicle that long.

Once the draft report is issued, automakers and other groups will have 60 days to comment. A final proposal must be adopted by April 1, 2018.

Maryland and eight other states must meet even more stringent targets — the California ZEV (zero emission vehicle) requirement. By 2025, a full 15.4 percent of new-vehicle sales in each of those states must be ZEVs. Many are concerned that the requirement simply cannot be met, especially in the cooler East Coast states. And the separate California ZEV requirement for those states means there is no longer a single national standard. Automakers originally signed onto the national program to avoid the patchwork of state laws that was starting to emerge.

As if to illustrate the Allianceês report about fuel economy being a low priority for consumers, a report from the University of Michigan last week showed that the average fuel economy of new vehicles sold in June had dropped 0.1 mpg from May, to 25.3 mpg. The reportês authors said the decline is likely caused by the increased market share of pickups and SUVs.