Imagine if your car could travel 56 miles on a gallon of gas. You could cut your gasoline costs in half (at least). You would only have to fill up once a week (if that). You could drive from Boston to Cleveland without even stopping the car! And get this: If the Obama administration has its way, these dreams could come true by the time today’s toddlers get their driver’s licenses.
The president is pushing regulators to approve a plan which would require all automakers to maintain an average rating of 56 mpg for their vehicle offerings by 2025. That’s about twice what today’s vehicles are averaging.
Now, before you start doing cartwheels, let’s take a closer look at this proposed standard. The 56 mpg figure is an average, meaning that only about half of the vehicles sold in the U.S. would meet that level of fuel economy. In addition, the rules would differentiate between smaller passenger cars and pickup trucks or SUVs. Vehicles in the latter category would only be required to meet a lower standard.
And there’s more. The fuel mileage “rating” that automakers promote is actually much higher than what you’ll see on new car window stickers. For instance, a rating of 56 mpg actually works out to about 35 to 40 mpg under actual driving conditions. Plus, automakers can earn “credits” toward meeting the standard by adapting certain automotive features. As an example, a car which contains a government-approved “clean” air conditioning system only has to reach a rating level of 50 mpg instead of 56 mpg.
Not surprisingly, auto manufacturers and trade groups oppose the Obama administration’s new rules. They say that the regulations would penalize vehicle owners who need pickups or SUVs (like farmers and people with large families), force the auto industry into relying on hybrids and electric cars for most of their revenue, and jack up the average cost of new vehicles. And, as we all know, a rise in car prices is almost always accompanied by a rise in auto insurance rates. Even the Environmental Protection Agency admits that the proposed regulations would add several thousand dollars to the price tag of every new car, truck, or SUV.
So what would all this mean for you?
If the higher fuel standards are adopted, gas mileage in new vehicles would begin increasing quickly. That’s because the regulations actually “stairstep” upward each year until 2025 (for example, the rating would be 29.5 mpg for 2012 model year vehicles). It stands to reason that vehicle price tags would also inch upward accordingly.
But there’s no evidence that the new rules would cause automakers to abandon production of larger cars, SUVs, or pickups altogether – although the engines in these vehicles might shrink and become more fuel-efficient.
We’ll know more by the end of September, when officials are due to release vehicle fuel standards for 2025. And there’s always the possibility that during the next 14 years, lawmakers will pass legislation or automakers will request and receive waivers that will retard the progress toward the 56 mpg target. So there’s no reason to start calculating future gas savings anytime soon.