Automakers Support President in
Development of National Program for Autos

Washington, DC – On Tuesday, May 19, automakers will join with President Obama, federal agencies,
governors and environmental leaders to announce a commitment to establish a National Program that
will reduce carbon emissions and increase fuel economy.

"For seven long years, there has been a debate over whether states or the federal government should
regulate autos. President Obama's announcement ends that old debate by starting a federal rulemaking
to set a National Program," said Dave McCurdy, president and CEO, Alliance of Automobile
Manufacturers. "Automakers are committed to working with the President to develop a National
Program administered by the federal government."

"What's significant about the announcement is it launches a new beginning, an era of cooperation.
The President has succeeded in bringing three regulatory bodies, 15 states, a dozen automakers and
many environmental groups to the table," said McCurdy. "We're all agreeing to work together on a
National Program."

A National Program is a priority to automakers because a national fuel economy program allows
manufacturers to average sales nationwide, so customers in all 50 states can continue to buy the types
of vehicles they need for family, business and leisure. A National Program also avoids conflicting
standards from different regulatory agencies, and it gives automakers much needed certainty for long-
term product planning. In addition, a National Program delivers overall greenhouse gas reductions
equal to or better than those that would be realized under separate programs by different regulatory
bodies.

EPA and NHTSA intend to initiate a joint rulemaking that reflects a coordinated and harmonized
approach to implementing the Clean Air Act and the Energy Policy and Conservation Act. The
rulemaking is expected to include several elements important to automakers, including:
• Preserving Vehicle Diversity: Harmonized NHTSA and EPA standards would be attribute-
based, or based on a vehicle's "footprint." This approach allows for a range of sizes of vehicles
to meet consumer needs for passenger and cargo room.
• Providing Certainty for Long-term Planning: Automakers would know what standards will
be through 2016, which is critical in an industry where bringing a product to market typically
takes 5-7 years. The National Program is intended to give automakers sufficient lead-time to
incorporate technology as part of existing vehicle design schedules, so manufacturers would
not have to incur added costs from redesigning all their models at one time.
• Providing Flexibility in Achieving CO2-Reduction Goals: EPA and NHTSA would consider
a range of compliance flexibility measures, such as earned credits, credit trading, air
conditioning credits, and credits for using additional technologies that reduce carbon dioxide
(CO2).
"The debate over who sets CO2 and fuel economy standards for autos has been decided, but there is
still more to talk about. We have the broad outlines of an agreement, but we will need to work closely
with NHTSA, EPA and California in the rulemaking process to resolve multiple issues, trying to fit all
the elements together into one program. There is a strong commitment from everyone to move past
any hurdles that may arise as we work through differences in the way these two federal agencies set
standards," said McCurdy.
"We want to finalize a national program so we can move on to policy discussions on what the future of
sustainable mobility looks like and how we can get there faster," said McCurdy. "Alliance members
are supporting measures that reduce carbon dioxide even more, like low carbon fuels, advancements in
battery technology and consumer incentives to get more advanced technology autos on our roads."

Autos represent 17% of all man-made CO2 in the U.S, according to EPA. Carbon dioxide is created
when any fossil fuel burns, whether it is a car burning gasoline or a backyard grill burning charcoal.
Therefore, to reduce CO2, automobiles will need to burn less fuel. That means automakers will need to
sell fuel-efficient technologies that will produce less CO2.

"All industries will be called upon to reduce carbon emissions," said McCurdy. "Automakers play an
important role. Today, there are more than 50 auto technologies on sale that reduce emissions,
increase mileage and run on clean fuels." Automakers are selling 130 models of automobiles that
achieve 30 mpg or greater on the highway. Consumers can now test drive 35 models of hybrids or
clean diesel in dealer showrooms. More technology is on its way to market.

"We will need to use every engineer we have and every investment dollar available to make our vision
of sustainable mobility a reality. And, we are going to need Americans to buy our clean, fuel-efficient
autos in large numbers in order to meet this climate change commitment," said McCurdy.

The Alliance of Automobile Manufacturers is a trade association of 11 car and light truck
manufacturers including BMW Group, Chrysler, Ford Motor Company, General Motors, Jaguar Land
Rover, Mazda, Mercedes-Benz, Mitsubishi Motors, Porsche, Toyota and Volkswagen. For more
information, visit the Alliance website at www.autoalliance.org.
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Historical Information

In 1975, the U.S. Congress assigned responsibility for setting automobile mileage standards to the
National Highway Transportation Safety Administration (NHTSA), which is housed within the U.S.
Department of Transportation.

In 2002, the State of California passed AB 1493, legislation which regulated auto carbon dioxide
(CO2) emissions and fuel economy.

In 2004, the State of California finalized carbon dioxide regulations for automobiles. Automakers
challenged the state action in federal court, saying only the federal government can set mileage
standards to ensure a consistent fuel economy program across the country.

In April 2007, the U.S. Supreme Court ruled that the Environmental Protection Agency (EPA) should
review possible dangers from CO2 emissions.

In December 2007, automakers supported Congress passing the Energy Independence and Security Act
requiring automakers to increase fuel economy by at least 40% to 35 mpg -- thereby reducing CO2 by
at least 30% -- by 2020.

In 2008, the Bush Administration denied California's request for a waiver from the federal Clean Air
Act to implement its own CO2 program.

In January 2009, President Obama directed EPA to review the waiver decision.

In March, NHTSA raised Corporate Average Fuel Economy (CAFE) standards for cars in model year
2011 to 30.2 mpg, and a combined standard for cars and light trucks (minivans, SUVs, pickups) to 27.3
mpg. (The standard is based on what consumers purchase. That is, the standard represents the average
mileage achieved by all vehicles sold by a manufacturer.)

In April, EPA issued a proposed finding that CO2 poses a danger to health and welfare, opening the
door to federal regulation of CO2 from all sources. The U.S. House of Representatives also began
hearings on climate change legislation during April.