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CAFE Standards Get Harder To Reach As Gas Prices Fall

The US federal government might think about loosening the CAFE fuel-efficiency requirements for 2025.

Remember, the target is 54.5 miles per gallon by 2025. Today, the CAFE level is a little over 30. How we get from here to there is something the US Environmental Protection Agency (EPA) is monitoring closely. Thus, the EPA just released an annual flash report on how the auto industry is progressing towards meeting the nation's fuel economy goals.

Johnson Controls executive Brian Kesseler isn't likely to get any holiday presents this year from Nissan chief Carlos Ghosn or Tesla Motors head Elon Musk, but lots of other folks might be happy with what he has to say about automakers' efforts to reach stricter fleetwide fuel-economy standards.

Ricardo Plc appears to be adhering to an "it takes a village" approach to ratcheting up US fleetwide fuel economy levels to the higher Corporate Average Fuel Economy standards the federal government set for 2025. Last year, the US government finalized the new CAFE standards, which call for increasing fleetwide fuel economy starting in 2017 and ending at 54.5 miles per gallon (about 40 mpg in "real world" terms) by 2025.

Consumer Reports isn't wearing quite as rosy a pair of sunglass as the federal government is about the savings prospects for US drivers once stricter fuel economy standards take effect in model year 2017. Still, the publication says drivers will save a few thousand dollars worth of gas during the lifetime of their vehicles.

So before we get into having stricter fuel economy standards that will save Americans as much as $1.7 trillion at the pump, let's spend some more money studying the issue a little more, shall we?

Despite the positive public face, the behind-the-scenes discussions that resulted in the 2025 CAFE standards of 54.5 miles per gallon agreement were not easy. There might be more problems going on, since the Obama administration has pushed back implementation of the new rule – which affects model-year 2017 vehicles and later – to a later date. A self-imposed deadline meant the rule was supposed to be issued yesterday.

What an extra few hundred bucks a year or so in everyone's pocket will buy almost two decades from now is anyone's guess, but for us, that's beside the point.

The U.S. Department of Transportation, Environmental Protection Agency and the White House have announced new fuel economy standards for model year 2017-2025 vehicles that will require cars and light trucks to yield a combined 54.5 mpg, as was proposed back in July.

Today, a House of Representatives panel will hold a hearing to review the Obama Administration's ambitious fuel economy standards of 54.5 miles per gallon by 2025.

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