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Automakers claim new fuel economy ratings will put hundreds of thousands out of work  (Source: Business Week)
Supporters of increased efficiency standards claim the numbers are inflated

The battle between the auto industry and the federal government over changes to fuel economy regulations is exploding. Lawmakers in Washington want to impose much more efficient standards on future vehicles that could see a fleet wide fuel economy average of 62 mpg in effect by 2025.

Some in the automotive industry argue that the costs to reach the lofty 62 mpg fleet wide average will be much higher than the cost of burning more fuel in less efficient vehicles for consumers. Automakers have previously claimed that the costs would have a dire impact on the industry.

new study by the Center for Automotive Research has been published and the study claims that the rise in efficiency standards by 2025 to 62 mpg could add up to $9,790 to the cost of a new vehicle and will reduce sales by 5.5 million units. The report also claims that the resultant price increase would force a reduction of 260,000 automotive industry jobs due to reduced demand for vehicles by consumers.

On the other side of the battle, those pushing for the increased efficiency standards claim that the tech needed to meet the efficiency standards would only add $770 to $3,500 to the price of a new vehicle.

David Friedman, deputy director of the Union of Concerned Scientists' Clean Vehicles program and supporter of the new efficiency mandate, said, "The Obama administration should ignore this industry-advocate propaganda piece and focus on setting the strongest vehicle efficiency and global warming pollution standards based on credible scientific analysis."

President and CEO of the Union, Jay Baron, says that the main difference in cost between the industry and government studies depends on how much the price of the technology will come down over the next 15 years.



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By RussianSensation on 6/15/2011 2:38:04 PM , Rating: 1
If consumers demand more efficient vehicles and are willing to pay a premium for those vehicles, then the manufacturers will produce those vehicles.

Why should the gov't continue to interfere in free markets/market economy? The government should never tell a business how and what to manufacture unless the country is in a state of emergency (i.e., need to convert factories to make military equipment in a state of war, need to manufacture vaccines against a world-wide disease epidemic, etc.).

The most laughable statistic is the 62 MPG metric. What calculus formula was used to arrive at this arbitrary number? And if manufacturers actually do comply, will these politicians release a new report asking for 150 MPG in 10 more years? This method only prolongs the use of the 100-year-old internal combustion engine. By not letting supply/demand work how it should, it actually discourages more modern and efficient alternative power sources to succeed the internal combustion engine.

Prices of gasoline SHOULD rise as high as possible on their natural supply/demand curve, so that it paves way for newer technologies. Then market participants will migrate on their own without gov't interference.




By phantom505 on 6/15/2011 2:43:15 PM , Rating: 1
That's the government's job. Tell business what to do when they won't do it. That's why we have a government, as written in the constitution for all those purists out there.

Companies are psychopaths and care only about profit. Sure spontaneous demand can spur that need for profit, but Joe Blow usually doesn't understand anything that is not immediately biting him in the chops, right then.

More times than not the government has to either take lead or tell companies what to do. It's that simple. Sometimes they cooperate, sometimes they kick and scream. It's just the approach of the politicians that dictate the reaction.


By RussianSensation on 6/15/2011 2:52:29 PM , Rating: 2
In a free market without gov't interference, the price of gasoline would continue to rise, making it more costly for consumers. Some manufacturers would use this as an opportunity to create more efficient vehicles. As those vehicles start to sell well, other competitors will follow.

Let's consider an alternative scenario. Let's say most manufacturers won't produce more efficient vehicles due to low demand from consumers. Eventually, gasoline prices will continue to rise since oil is a scarce commodity. So at some point alternative technologies will become less expensive than internal combustion engines. Then, we will have replaced the internal combustion engine just like it replaced the steam engine.

In both cases, the market will correct itself, even if it takes longer. What you are proposing is to speed up this process through gov't interference. Unfortunately, this isn't the time to do it - unemployment is near all-time high, economy is weak, there are fears of inflation, etc. The economy is too fragile to force consumers and business to subsidize these increases in efficiency at this time, unless the cost of the investment is offset by the benefits, which doesn't sound like it will be.


By Nutzo on 6/15/2011 4:45:18 PM , Rating: 2
That's NOT the governments job.

Try reading the constitution. There’s nothing in it that gives the federal government the right to decide what mileage the cars we buy need to get.

While I'd love to have a car that gets this type of mileage the number is complete unrealistic. 62 MPG is higher than even the best current hybrids. Maybe a tiny 2 seater hybrid the size of a smart car might be able to get that kind of mileage, but good luck finding something that can haul 3 or 4 kids or a stack of 4x8 sheets of plywood.

What these government mandates do is push technology that is not ready, either due to price or reliability. We can make cars that run on electricity, or hybrids that get 50mpg in the city, but the costs are so much higher than a similar sized gas power car, that most people will never break even, even if gas hits $6/gal.


By FITCamaro on 6/15/2011 11:39:57 PM , Rating: 1
What countries constitution are you fucking reading? Because I damn sure know it isn't the US constitution.


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