NEW CAF_ rules will add to cost of new cars
Fuel economy requirements will add about $2,900 to the cost of a new vehicle on average by 2025. Automakers supported the proposed changes last year because they wanted a single nationwide standard. (California agreed not to set up separate standards through 2025.) But NADA is unhappy with the new rules, which require cars to average 55.3 to 56.2 mpg by 2025, and light trucks to average 39.2 to 40.3 mpg.
This increase shuts almost 7 million people out of the new car market entirely and prevents many millions more from being able to afford new vehicles that meet their needs, says NADA Chairman Bill Underriner.
The new rules will add $1,836 to a vehicles cost; the rest is from the previously passed 2011-16 rules. A vehicle buyer is expected to save an average $3,400 to $5,000 over the life of the vehicle after accounting for the higher upfront cost.
The rules set up a 4 percent average annual increase that will nearly double the U.S. fleets fuel efficiency. EPA and NHTSA will do a midterm review of the regulations in 2020.
Global Automakers president and CEO Mike Stanton notes one potential glitch: Compliance with higher fuel-economy standards is based on sales, not what we put on showroom floors. EPA and NHTSA would not speculate on how the regulations would affect vehicle sales.
Because automakers can improve air conditioning systems to cut emissions without improving fuel efficiency, the actual CAF_ average will be about 40 mpg by 2025. Automakers can also get credits for compressed natural gas vehicles and for large pickups that improve their mileage.
EPA and NHTSA expect the rules to increase the use of eight-speed transmissions and higherefficiency gearboxes. They forecast that sales of plug-in electric and all-electric vehicles could jump from under 3 percent today to 49 percent by 2025.
But Chrysler, which with Volkswagen opposed the proposed rules last year, has said it will rely more on light-duty diesels and compressed natural gas than on electric vehicles.
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