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Now that the National Highway Traffic Safety Administration and Environmental Protection Agency have established fleet fuel economy standards of 35.5 miles per gallon by 2016, the government agencies are hard at work on the next phase of increases that will stretch out to 2020 and beyond. The 2007 Energy Independence and Security Act mandated 40 mpg by 2020 as a minimum, but the standards could actually be set higher. That's exactly what the Consumer Federation of America (CFA) and Natural Resources Defense Council (NRDC) want.

A report from CFA declares that the technology exists to raise fuel economy standards to 60 mpg by 2025 and estimates that doing so would add about $2,600 to the cost of new cars and $3,200 to light trucks. CFA's analysis indicates that, at the equivalent of $3.50 per gallon in 2025, the payback period for the extra costs would only be five years. While the technology definitely exists to produce 60-mpg vehicles, the real problem is consumer behavior, and most American consumers probably won't buy the kinds of small cars required to meet those standards at current fuel prices – particularly with that much cost tacked on to their MSRPs.

Hitting 60 mpg while maintaining the size and capability Americans currently buy would doubtlessly cost substantially more. In order to get people to buy such vehicles, critics suggest there will need to be significantly higher prices at the pump. The idea of a revenue-neutral petroleum tax (whereby other taxes would be cut to compensate) that establishes a floor price of at least $4 per gallon could be a good place to start on the way to 40 mpg. Getting people into 60-mpg vehicles would probably require an even higher floor – perhaps $5/gal or more.

[Sources: Green Car Advisor, Consumer Federation of America]


New CFA Report: 60 mpg or More Standard is Economically Achievable and Truly Responsive to Consumer Needs

Administration to Announce Intent for 2017-2025 CAFE/GHG Standards in September

WASHINGTON, Sept. 2 /PRNewswire/ -- A new economic analysis from the Consumer Federation of America (CFA) identifies a fleet-wide car and light truck fuel economy standard of 60 miles per gallon (mpg) by 2025 as critical and necessary for consumer pocketbook protection. The Obama Administration will release a Notice of Intent for 2017-2025 light duty fuel economy standards on September 30th.

"Previous fuel economy standards have left huge consumer savings on the table. A 60 mile per gallon standard in 2025 will capture those enormous benefits and provide important protections for American consumers," commented report author Mark Cooper, CFA Director of Research.

The new analysis examines the consumer and societal impacts of the 2016 standard, calculates the standard that achieves the maximum net economic benefit and measures the consumer and society impacts of those standards.

The report includes a consumer pocketbook analysis, which finds that for consumers purchasing 60 mpg cars and trucks the value of the gas savings will be greater than the increased cost of the loan.

Consumers will save money in the first year of ownership, and their purchase, when financed by a five year auto loan, will be cash neutral in the first month.

A 60 mpg vehicle will save the typical car buyer over $1,000 in gas costs over and above the increased car cost by the time the auto loan is paid off (typically 5 years) and $3,000 over the life of the vehicle (roughly ten years), which the consumer could capture in the sale price of the vehicle or by holding on to it.

The report combines estimates of technology cost from the National Academy of Sciences and MIT with the costs benefit analysis previously prepared by the Environmental Protection Agency and the National Highway Traffic Safety Administration (NHTSA) to derive its estimates of what is technologically feasible and economically justified. The Energy Information Administration's projected price of gasoline for 2025 of $3.50 (in 2010 dollars) is used. For the consumer pocketbook analysis, a five-year auto loan at 7 percent interest is assumed (which is the average auto loan rate for the past 20 years).

According to the report, the 2016 standard of 34 mpg falls far short than what would be in the best interest of consumers and society. The economic analysis shows that going to 38 mpg would have delivered additional benefits of $140 billion over the life of the vehicles covered. Moving the standard to 60 mpg will add hundreds of billions of consumer savings and reduced greenhouse gas emissions by hundreds of millions of tones.

The report identifies a reluctant automobile industry as the biggest obstacle to achieving the greatest consumer benefits through higher fuel economy. "The approach taken by NHTSA in the past allowed the ill-informed plans of automakers to restrain the levels of standards," according to the report.

"One of the reasons that the administration must set targets so far in advance is that the industry has been slow to adjust to the clear consumer demand for greater fuel economy," Cooper added. "We must set our sights on a higher mid-term goal like 60 mpg by 2025 to get the industry moving in the right direction.

"The decision to coordinate standard setting between California, the Environmental Protection Agency and the National Highway Traffic Safety Administration was an important step forward that required a compromise on the initial levels at which the standards were set," Cooper added. "The procedural progress must now be followed up with substantive progress that moves the standards to much higher levels. A real victory can only be claimed when the standards are set at a level that captures the immense benefits that had been left on the table."

The report is available at: http://www.consumerfed.org/elements/www.consumerfed.org/File/60mpg_Study090210 .pdf

The Consumer Federation of America (CFA) is a non-profit association of over 280 consumer groups that was founded in 1968 to advance the consumer's interest through advocacy, research, and education

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    • 1 Second Ago
      • 4 Years Ago
      CAFE = politicians afraid to raise the gas tax.
      CAFE = crock of S#&T!

      You can't force feed MPG requirements on consumers when gas is as cheap as it is.
      • 4 Years Ago
      Why not just f$ck people in the a$$ so they don't want to sit in a car and drive to work? What kind of jerk advocates such high taxes so people will want to pay $3k + for fuel efficient engines (in likely very tiny cars)?
      • 4 Years Ago
      In celebration of this momentous announcement heralding a new era of environmental friendliness and conscientious management of our limited natural resources I will now get in my 2001 Porsche 911 Carrera 4 and see if I can get the fuel economy estimator to drop into single digits. I bid you good night.
      • 4 Years Ago
      Wow 60MPG, what will they do with the muscle cars?
        • 4 Years Ago
        In the 60s and 70s, it was inconceivable that anything with a v8 could get more than 8-9 mpg, now they are getting almost three times that.

        If there is demand for such cars then, they will be out wreaking havoc, and getting 60mpg doing it.

        If the car manufacturers thought like many of the commenters on this board, we would still be driving Mustang lls and Gremlins.
        • 4 Years Ago
        Yeah but if they make a car that efficient itz engine wouldnt be very capable of making much power, you just wouldnt see a 300hp prius.
      • 4 Years Ago
      Death to big trucks, big SUVs, Mustangs, most of the Dodge/Chrysler products, Corvettes, almost everything American.
        • 4 Years Ago
        A Corvette from the 60s, with a 327 got roughly 9mpg, a new Z06 gets close to 30mpg. Who are you to say a Vette might not be getting 60mpg by then?

        Given all of the advancements, I like the odds, but nice try dingbat!!

        • 4 Years Ago
        Drop in a heavy-duty electric motor and you'd boost efficiency and power to boot. Considering that SUVs and trucks are the profit leaders for manufacturers, I doubt these vehicles would simply disappear.
        • 4 Years Ago

        Yeah, freedome of choice is a bad idea. People should all drive what you want them to drive."

        Within reason. When it has been proven over and over again that american vehicles are poorly designed, poorly engineered, dangerous to drive, deadly to the environment, etc, they should be taken off the market. The problem is that most domestic consumers are idiot rednecks that love the appeal of a archaic V8 and live axle.

        Anyone who buys a Mustang/Camaro/Challenger over a Miata or S2000 is an idiot. Why should the rest of us suffer for their farm-implement fanboyism?
        • 4 Years Ago
        Go back to Autoblog Green
        • 4 Years Ago
        For Hondaz & bwoodahl:
        What rock were you born under ?????
        If you can find it please go back
        • 4 Years Ago
        That's kinda over the top, bwoodahl.
        • 4 Years Ago
        SUV's sale levels are much lower than they where 10 years ago. Ford's made a lot of progress with the fuel economy of the Mustang. Chrysler's Pentastar engine is a big step in the right direction, and not every Chrysler product is equipped with a HEMI. The next Corvette is getting a smaller V8 and the car will be lighter.
        This isn't going to kill the American or Foreign brands, it's just going to make them produce more efficient cars/trucks.
        • 4 Years Ago
        $4!7heads like you don't belong on car blogs. Why go on a car blog if you hate most cars worth driving? Prii pretty much define a "dull" driving experience. Electric cars still have a LONG way to go before they're viable. >300mph range and equal stats across the board for an approximately equal price are far from the picture w/ current EVs, even the Tesla (tops out at 130mph and only gets ~150 mi range. Can get a ZR1 for about the same $ that will beat all its stats and still get 250 mi to a tank. Plus refilling takes 5 min. as opposed to 8 hours.)
        • 4 Years Ago
        I have a hard time imagining a fat, french fry-fueled American, beer-bellied and all, spare tire dripping over his belt, shoe-horning his lard azz into a little Fiat 500. But I think it will come to this -- as they will not have anything else to drive.
        • 4 Years Ago
        SeattleJeremy's got it - look at the progress domestics have made in the past decade! Sure it took a kick in the pants, but some of the best cars in the world have been produced in North America and still are today. I'm proud the Mustang, Camaro and Challenger are still around, who aspires to drive a Prius? Seriously...
        • 4 Years Ago
        Yeah, freedome of choice is a bad idea. People should all drive what you want them to drive.
        • 4 Years Ago
        HonduhzFTF, wasn't it just in the last week that Honda axed the Civic Type-R because they couldn't get a sub-200hp 4cyl engine past Europe's emissions standards? Yes, I believe so.
        • 4 Years Ago
        You must be some stupid eco-mentalist. There is a reason you have no friends and drive a crappy car. Its cause your full of S*$%. Grow a pair you idiot and if your a girl well develop some taste in cars. Its people like you that make me want to burn more gas to offset the crap you like.
        • 4 Years Ago
        Thanks for demonstrating yet again the definition of IQ. For every person over 100 ...
        • 4 Years Ago
        Thank god, a world like that only exists in my dreams so far. This will hopefully put an end to all the rwd american smog mobiles killing the planet and destroying the climate.
        • 4 Years Ago
        thank goodness you have no say what so ever and we don't have to care about you.
      • 4 Years Ago
      Bail out out of the auto industry round two!

      If politicians had any balls they`d raise gas taxes, instead of putting the burdon on the auto makers shoulders. Then tell the people what they can and can`t buy.
        • 4 Years Ago
        Gas taxes are regressive, meaning they affect people who already can't afford it the worst. It's political suicide.
      • 4 Years Ago
      Someone has been hitting my Mustang GT exhaust a little too much. Stop tailgating me.

      Suck my straight pipes.
      • 4 Years Ago
      how about if i'm going to have a car payment,i drive what i want to drive and everybody who doesn't like my choice of vehicle can kiss my ass...you want to drive a twinkie with wheels then knock yourself out...otherwise piss off
      • 4 Years Ago
      Jake is just about perfect...

      People should buy whatever they like. To a point...

      The Government wants to slow down the imports of Oil because its likely cheaper than having more Wars, wouldn't you think?

      How you going to do that? If Americans aren't going to voluntary move to smaller vehicles that fill their needs, then you're not left with many options.

      One thing to do is make it more expensive to buy those things that YOU want, rather than NEED. You need a CAR, you don't need a Mustang GT. So if YOU a Mustang GT, buck up, don't complain and pay for it.

      What I am hearing now is those on the margins, those people that can BARELY afford what they need and believe the Government is jumping in front of them and saying "You can't have this". That is not what is happening. Fuel Economy needs to go up because gas prices which are kept low in America do to policy rigging will not longer be $3, but $4 and $5 soon enough. When the Economy comes roaring back, do you REALLY think gas will stay at $3 and enough bitching by the population will keep it there? That will not happen.

      If you won't agree to a Gas Tax increase, okay. If we say we don't want 60mpg cars on the road, okay.

      So what happens when you can afford to trade-in or buy a new car but because you don't want small "penalty" boxes, there's nothing but rear drive V6 and V8 cars available with an average economy of 20mpg but gas is $6-7 a gallon during the summer peak?

      What these CAFE standards really mean is that few niche cars/trucks will be available and they'll well have to sell more B and C segment cars.

      Watch - http://www.autolinedetroit.tv/show/1426?play
        • 4 Years Ago
        You think Americans are not willing to buy smaller cars? Have you looked around lately? A few years back, the roads were covered with SUVs, not so much these days.

        You also fail to mention all of the new hybrids and EVs catching on.

        Who knows what we will be driving 25 years from now. I would guess we will be running on many different fuels and gas will be marginalized by then.

        Raising gas taxes and taxing every desirable car out of everyone's price range, like you suggest would be political suicide and would only do more to widen the gap between the haves and have-nots. We are not in Europe, thank God!!

      • 4 Years Ago
      • 4 Years Ago
      The bitter taste of regulation.
      • 4 Years Ago
      So help me Consumer Federation of America, I will not drive your boring cars.
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