D. Shepardson: Detroit News
Washington— The Obama administration on Wednesday unveiled its proposed 2017-2025 fuel efficiency standards, saying it plans to nearly double requirements to 54.5 mpg by 2025 - a move that will cost the auto industry $157 billion.
The National Highway Traffic Safety Administration and Environmental Protection agency said in proposing the nearly 900-page regulation that consumers will save more at the pump than the higher vehicle costs.
New rules will save more than $1.7 trillion at the pump, or more than $8,000 per vehicle by 2025, the administration said in statement - and have net benefits of at least $358 billion.
The proposal will add $2,023 to the average cost of a new vehicle in 2025 - but they will save on average $5,200 to $6,600 in reduced fuel costs.
For some automakers, it would be higher. Ford Motor Co. cars would jump $3,261, on average, in 2024. In 2025, GM vehicles would climb $2,734 and Chrysler $2,638 on average. Toyota vehicles would rise just $1,631 and Volvo $595.
EPA said a consumer who bought a new car over a five-year-loan would save $140 per year more than the higher monthly payments.
The rules go easier on light trucks - SUVs and pickups. They have to improve efficiency by 3.5 percent annually between 2017-2021, while cars must improve by 5 percent annually over the same period.
Light trucks would be required to improve by 5 percent annually between 2021-2025 - but only if the government's "mid-term review" found that boost feasible.
The new rules will set requirements by size of vehicle. A Honda Fit would need to average 61.1 mpg by 2025, while a Chevrolet Silverado pickup would have to get 33 mpg. A midsize Ford Fusion would need to average 54.9 mpg, while a Toyota Sienna minivan would need to average 39.2 mpg.
Rep. John Dingell, D-Dearborn, praised the announcement.
"The national program allows American manufacturers to continue building the cars consumers want to buy, it gives industry the certainty they need to invest in the future and promotes American manufacturing of advanced technology vehicles," Dingell said.
The actions also will reduce U.S. dependence on oil by an estimated 12 billion barrels, and, by 2025, reduce oil consumption by 2.2 million barrels per day, the White House said. The new rules will cut oil consumption by 4 billion barrels and cut 2 billion metric tons of greenhouse gas pollution over the lifetimes of the vehicles sold in those years.
"These unprecedented standards are a remarkable leap forward in improving fuel efficiency, strengthening national security by reducing our dependence on oil, and protecting our climate for generations to come," said U.S. Transportation Secretary Ray LaHood.
EPA Administrator Lisa Jackson also praised the new proposal - which has net societal benefits of $420 billion.
"By setting a course for steady improvements in fuel economy over the long term, the Obama administration is ensuring that American car buyers have their choice of the most efficient vehicles ever produced in our country," Jackson said.
Jackson and LaHood plan to brief reporters this afternoon.
Phyllis Cuttino, director of Pew's Clean Energy Program - a group that had fought in Congress for legislation approving higher fuel increases for passenger cars - heralded the proposal. "Today's announcement is good news for American consumers, U.S. national security, and the environment," she said. "The price shocks of the past decade have brought home the economic challenges and consumer hardships associated with our dependence on foreign oil."
She noted that in 2010, the United States imported more than 4.3 billion barrels of oil, sending nearly $400 billion abroad "while our own economy struggled to recover from recession."
The agreement gives hefty incentives to full-size pickups to become mild or full hybrids, along with incentives for fuel cell vehicles and electric vehicles. But it offers no new incentives for diesel vehicles — much to the dismay of European automakers.
The National Highway Traffic Safety Administration head David Strickland, said he's had talks with senior VW and Daimler officials. He also said the administration plans to hold at least one public hearing on its proposal as it accepts public comments from automakers, environmentalists and the general public.
The EV credit multiples the credits for building the more expensive vehicles by up to two times in order to meet fleet-wide mandates.
EPA said it proposes to cap credits for EVs starting in 2022 for all automakers. The cap would be 600,000 for companies that sell 300,000 EVs or plug-ins annually and 200,000 for all other automakers.
The administration has agreed to a "mid-term review" to ensure the 2021-2025 requirements are achievable — and could either raise or lower those yearly rules.
Automakers cited a study by the Center for Automotive Research in Ann Arbor that similar rules could be as much as $150 billion — but some environmentalists have sharply disputed that.
Talks centered on assurances that California will abide by the results of a mid-term review that is intended to ensure that requirements in the last four years of the deal are achievable.
The previous 2012-2016 rules to hike fuel efficiency standards to 34.1 mpg by 2016 will cost the auto industry $51.5 billion, the Obama administration has said.
Strickland also defended the agency's handling of a Chevrolet Volt that caught fire three weeks after undergoing a government crash test in May.
He said it was not uncommon for the agency not to disclose an incident like the fire — since it was conducting an investigation into why the fire took place — and not a broader defect investigation.
He defended the agency's response and handling of the crash, rejecting suggestions that NHTSA bore some of the blame for the fire.
Strickland said that General Motors Co. didn't have procedures to deal with depowering a battery in an electric vehicle after a crash — nor did anyone else.
The fire at a government testing facility in Wisconsin sparked a blaze of several nearby vehicles.
"There was no protocol by GM or anybody else in terms of what you do with a post-crash hull, with regards to the battery, " Strickland said. "It didn't exist."
Jim Federico, GM's global chief engineer for electric vehicles, said in a blog post Tuesday that GM hadn't developed its procedures before the May crash test.
"The fire occurred because the battery wasn't completely discharged after the test. GM developed its battery depowering process for the Volt after NHTSA's test," Federico wrote.
______
End
