New fuel economy standards for cars may mean more money in your pocket
Through 2025, new passenger cars and trucks sold in the United States will be getting a big boost in fuel efficiency — which could mean thousands of dollars in savings for the average American motorist.
On July 29, 2011, President Obama unveiled fuel economy standards that will require cars and trucks to get an average of 54.5 miles per gallon by 2025. The new standards apply to cars and trucks for the 2017 through 2025 model years.
|Lisa Jackson, administrator of the Environmental Protection Agency, says the new standards will help “break” U.S. dependence on foreign oil.|
In 2010, the federal government bumped up the required miles per gallon to 35.5 for the 2016 model year. The current standard is 27.5 miles per gallon.
Thirteen major automakers have agreed “in principle” to the 2017-25 standards, which still must be finalized.
It’s far too early to say how ushering in a new era of fuel-efficient cars and trucks will affect auto insurance rates.
Obama says the new standards will decrease oil consumption and reduce air pollution. By 2025, the new standards are expected to save an estimated $8,200 in fuel costs over the lifetime of a new vehicle, compared with the standard for the 2010 model year.
The new standards were developed by federal agencies, automakers, labor union leaders, environmentalists and others.
‘Another important step’
“This is another important step toward saving money for drivers, breaking our dependence on imported oil and cleaning up the air we breathe,” says Lisa Jackson, administrator of the Environmental Protection Agency. “American consumers are calling for cleaner cars that won’t pollute their air or break their budgets at the gas pump, and our innovative American automakers are responding with plans for some of the most fuel-efficient vehicles in our history.”
Automakers that have agreed to the new standards are Ford, GM, Chrysler, BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota and Volvo. Together, these automakers account for more than 90 percent of all vehicles sold in the United States.
Among the automakers missing from the list are Fiat, Mercedes-Benz and Volkswagen.
Automakers, environmentalists united
In a statement, GM says: “Reducing fuel consumption and lessening the automobile’s impact on the environment is important to our business because it’s important to our country and our customers.”
James Lentz, president and chief operating officer of Toyota Motor Sales USA Inc., says his company shares the Obama administration’s goal of making major advances in production of fuel-efficient cars and trucks.
“Obviously, there is still a great deal of uncertainty as to how the market will respond and what vehicle technologies consumers will embrace, which is why we are rolling out and testing a range of alternative fuel options,” Lentz says.
Michael Brune, executive director of the Sierra Club, a nonprofit environmental group, says that “after years of inaction and stagnation,” Obama has ensured 15 years of steady progress “to help cut our dangerous addiction to oil, create American jobs, save families money at the pump, curb life-threatening pollution and tackle climate disruption.”
Standards could mean lost funding
Not everyone’s happy about the new fuel economy standards.
The American Road & Transportation Builders Association says its analysis shows that between 2017 and 2025, the new fuel standards would result in the loss of more than $65 billion in federal funding for highway, bridge and transit improvements across the country. The association’s reasoning: As less fuel would be used by motorists, less revenue would be generated from fuel taxes.
“Like everyone else, we are supportive of efforts to reduce carbon emissions and improve fuel economy. However, from a public policy perspective, this is a classic case of the left hand not knowing what the right hand is doing,” says Pete Ruane, president of the construction trade group.