Aside from the Daimler-Tesla announcement earlier today, the big green car news for May 19 is the increase in CAFE standards that President Obama made just a short while ago, joined by Governors Jennifer Granholm (MI), Deval Patrick (MA) and Arnold Schwarzenegger (CA), members of Congress and Ron Gettelfinger (of the UAW), among others. Obama said the agreement was "an historic agreement to help American break its addiction to oil." Here are the details:
  • Currently, the DOT manages the fuel economy, the EPA deals with emissions, and CA can use the Clean Air Act to come up with even more stringent rules. This could create a situation where car makers have to deal with rules from three agencies. The new rule is a national standard that CA will support and the DOT and EPA will both adopt.
  • The CAFE standard will increase by five percent each year, building on the 2011 standard, until we get to 2016. This means an Industry standard of 35.5 mpg (for cars and trucks) by 2016, an average increase of eight mpg per vehicle.
  • Drivers will recoup the additional cost to buy one of these more-efficient vehicles in three years. Drivers will, over the life of the vehicle, save $2,800, on average, he said.
  • Obama said the new rule will save 1.8 billion barrels of oil over the next five years, and is the projected equivalent of taking 58 million vehicles off the road.
  • Despite previous disagreements between environmental and industry groups, the national policy has been agreed on and a series of "major lawsuits" will be dropped.
Yesterday, we heard that, much to the automaker's delight, the new CAFE standards create a national standard and incorporate California's strict emissions rules to raise the national fleet mpg average to 42 mpg for cars and 26 mpg for light trucks by 2016. The new standards go into effect in 2011. Currently, cars need to average 27.5 mpg and trucks must get 24 mpg.


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