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President Obama admires a Chevrolet Volt  (Source: Motor City Times)
Proposed standards are expected to be the same Washington and automakers agreed to last summer

The White House, California, and major automakers have came to an agreement on proposed economy standards that will see the requirements ultimately nearly double fleet wide fuel economy to 54.5 mpg by 2025.
People against the plan in the auto industry and Washington have argued that the 54.5 mpg goal will mean additional money added to the price of each vehicle and the loss of jobs in the auto industry due to reduced sales. Some estimates from Washington peg the cost to the automotive industry to meet the proposed standards at as much as $100 billion.
The proposed 54.5 mpg standard would save customers $6,600 in lifetime fuel costs for a 2025 model year vehicle. The Department of Transportation (DOT) and Environmental Protection Agency (EPA), however, rightly point out that the actual savings is closer to $4,400 when you take into account the additional cost of the technology needed (as reflected by the sticker price of the car) to make cars reach such lofty mileage numbers.
"These unprecedented standards are a remarkable leap forward in improving fuel efficiency. We expect this program will not only save consumers money, it will ensure automakers have the regulatory certainty they need to make key decisions that create jobs and invest in the future," said U.S. Transportation Secretary Ray LaHood. "We are pleased that we've been able to work with the auto industry, the states, and leaders in the environmental and labor communities to move toward even tougher standards for the second phase of the President's national program to improve fuel economy and reduce pollution."
"This is an important addition to the landmark clean cars program that President Obama initiated to establish fuel economy standards more than two years ago," added EPA Administrator Lisa P. Jackson. "The progress we made with the help of the auto industry, the environmental community, consumer groups and others will be expanded upon in the years to come -- benefitting the health, the environment and the economy for the American people."
A letter sent to President Obama this week from 100 House Democrats praised the new standards writing, "[The new efficiency standards] increase our national and economic security in an unprecedented way by dramatically decreasing our dependence on foreign sources of petroleum." 

The following are areas targeted for improving fuel efficiency across the board:
  • More efficient gasoline engines
  • Greater availability of diesel engines for passenger cars
  • Advanced transmissions
  • Improvements in vehicle aerodynamics
  • Reduced vehicle weight thanks to the use of aluminum and composites
  • Low rolling resistance tires
  • Improved air conditioning systems
  • More efficient vehicle accessories
The rules offered up today are not final; there is still a period for the industry and consumers to make comment on the rules. Administration official in Washington said recently that cars would have to average 62 mpg and light trucks 44 mpg to meet the economy standards of 54.5 mpg by 2025. The EPA estimates that real world driving would see 39 mpg.
Some in Washington have already argued that the new fuel economy proposal will legislate out of existence the cars on the market today selling for under $15,000. Obama and his administration still claim that the new standards will save consumers $1.7 trillion in fuel over the life of the vehicles on the road. That figure is contested and some fear that automakers will be forced to build vehicles consumers aren't interested in to meet the economy standards.

Updated 11/16/2011 @ 4:30pm to reflect official announcement and add quotes.

Sources: The Detroit News,

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By lightfoot on 11/16/2011 2:38:58 PM , Rating: 5
People against the plan in the auto industry and Washington have argued that the 54.5 mpg goal will mean additional money added to the price of each vehicle

Nice spin. Make it sound like the auto industry is increasing the price of the vehicle, not the government mandating that the COST of manufacturing the vehicle is going up. Nice trick.

The quote SHOULD read:
...argued that the 54.5 mpg goal will mean additional COSTS added to the MANUFACTURE of each vehicle.

The price of the vehicle may or may not increase. What will, without a doubt, increase is the cost to manufacture that vehicle.

Pricing is not a direct function of manufacturing cost, especially when the government intentionally distorts the market.

RE: Spin
By Targon on 11/16/2011 5:39:15 PM , Rating: 5
It is a given that it takes increasingly more effort to improve things going forward, which means that to go from a 40MPG highway figure to a 50MPG figure without going hybrid will take much more effort than going from 30MPG highway to 40MPG highway. Since there is an increased difficulty, that means the cost to develop the improvements will go up.

If the cost to meet the new CAFE standards is that much higher beyond 50MPG, then it is a given that the cost per vehicle will end up being more like $10,000 more per vehicle. Inflation will skew the numbers upwards, so the 2025 Focus, if the Focus line is still going at that point, will start at a low point of $26,000 for the base model, going upwards of $38,000 for one fully loaded.

Yea, CAFE requirements really help...if MPG means so much, then outlaw Ethanol and give us our 5MPG back.

RE: Spin
By bjacobson on 11/16/2011 6:00:31 PM , Rating: 3
thankfully, all these complex improvements will mean we will be able to wrench on our own cars for repair easier than ever or take it to Joe Mechanic down the street if you want a cheaper repair alternative.

RE: Spin
By invidious on 11/17/2011 10:56:39 AM , Rating: 2
Sarcasm? How does a more complex system make it easier to work on the car?

Strict government safety standards are the reason why cars are as complex and hard to work on as they are now. I dont see why strict government milage standards will be any better.

RE: Spin
By dsx724 on 11/17/2011 1:29:39 PM , Rating: 2
Strict government safety standards and CAFE requirements are the reason the auto industry has prosper to the way they are now. There are engineers working on cheap embedded systems that help drivetrains pollute less, produce more power, use less fuel, improve control and safety.

Just because you can't keep up with progress doesn't mean progress should stop. I personally don't want to be stuck with a slow smelly 1960's thunderbird for the sake of being able to "work on it" which is probably why I can see why strict government mileage standards will be better for the economy and the consumer.

RE: Spin
By Zoomer on 11/18/2011 9:28:04 AM , Rating: 2
Unfortunately, the higher prices for new models means that more people will stick to driving the older cars longer. This is counterproductive. And these who drive less essentially subsidize these who drive more. Is this desirable?

The better solution will be to raise gasoline prices so that the market is not distorted. People who drive more will either reduce their driving or demand more efficient cars.

RE: Spin
By Spuke on 11/16/2011 6:07:56 PM , Rating: 2
If the cost to meet the new CAFE standards is that much higher beyond 50MPG, then it is a given that the cost per vehicle will end up being more like $10,000 more per vehicle.
That's just staggering but most likely accurate. And figure in a bit more than that so the automakers can add options to "justify" the higher pricing to consumers. Cause no one will remember that the new CAFE standards are the cause. Like I said before, the cheap car no longer exists.

RE: Spin
By Targon on 11/16/2011 9:33:17 PM , Rating: 2
To be fair though, what you get for your money NOW has finally caught up to where these same features would have cost ten years ago.

Think about it, LCD screens rather than dashboard warning indicators that don't tell you what you have, dual-zone climate controls, features like anti-lock breaks and traction control are standard in many cars in the $16,000-$18,000 range, not to mention all the airbags and such that we have today.

So, ten years ago, for all of that, you might have paid $21,000(expensive compared to cars without all those features), but we are now at the point where we are paying that much, but considering inflation, the fact that we have them in that price range is actually pretty good. I remember when an on-board computer was a luxury item, and now that is standard.

I just hope that the $30,000 cars we see in 2020 will have all the features you see in a $30,000 car that is sold today.

RE: Spin
By Spuke on 11/17/2011 12:09:04 AM , Rating: 2
I remember when an on-board computer was a luxury item, and now that is standard.
That stuff wasn't added for free, cars are MORE expensive. Like I said, automakers will add features to help "justify" the price increases. Usually price increases have been somewhat hidden by cost of living increases so we don't notice. But since a good chunk of the next 14 years will be in a recession, I doubt those increases will go unnoticed this time. Regardless, there are people now that can't afford that $33,000 average car price now that COULD afford that average $21,000 price in 2001. BTW, inflation between now and 2001 hasn't been all that much.

RE: Spin
By YashBudini on 11/19/2011 7:17:57 PM , Rating: 2
That's just staggering but most likely accurate.

Also worth considering - at 274,000 miles the cost of fuel over 16 years has exceeded the cost of the vehicle I drive.

I have a 4 speed automatic trans. A 5 speed would have probably more than paid for itself, perhaps even several times over.

RE: Spin
By BZDTemp on 11/17/2011 4:05:49 AM , Rating: 3
If the cost to meet the new CAFE standards is that much higher beyond 50MPG, then it is a given that the cost per vehicle will end up being more like $10,000 more per vehicle.

Not given at all. The $10,000 you state is an insane number in auto production context - many cars total production costs are much lower than that number.

If you want to pull numbers out of a hat then at least make them somewhat realistic.

RE: Spin
By tng on 11/17/2011 8:31:20 AM , Rating: 2
Yea, CAFE requirements really help...if MPG means so much, then outlaw Ethanol and give us our 5MPG back.
Depends on the car. Some vehicles may not even give you 5 mpg back.

I took my 99 Honda Civic that normally gets 39/40 mpg to a place that sells gas without the ethanol and nursed it, I got 55 mpg. That was highway mileage at around 65mph, but it does illustrate to me that ethanol is a failure as an environmental measure. Of course the gas was about a buck a gallon more than the standard with ethanol.

RE: Spin
By Ringold on 11/17/2011 11:23:50 AM , Rating: 2
Of course the gas was about a buck a gallon more than the standard with ethanol.

Probably only due to being a boutique fuel at this point. Drop ethanol from the entire fuel supply and I don't see why the price would change much either way.

RE: Spin
By Masospaghetti on 11/20/2011 1:34:01 PM , Rating: 2
I took my 99 Honda Civic that normally gets 39/40 mpg...

You only get 1 mpg better on the highway than in city driving?

quote: a place that sells gas without the ethanol and nursed it, I got 55 mpg.

You're claiming you went from 40 MPG to 55 MPG by using pure gasoline. Right? That's a staggering 37.5% increase in fuel economy. Since ethanol has approximately 75% the energy content as gasoline, E10 (which is the maximum currently legal to sell in pump gas) has approximately 97.5% the energy content as gasoline.

If you're numbers are correct, ethanol would have a negative energy content of about -70,000 BTU.

More likely is that your MPG numbers are more of a failure than the environmental measures you're referring to.

RE: Spin
By matty67 on 11/21/2011 7:35:34 PM , Rating: 2
Last summer I drove a 2005 Silverado 4x4 with the 4.8L V8 from BC, down to the I90 and then east to Iowa. As we moved further and further east our mileage moved lower and lower. We went from no ethanol to only ethanol blends throughout the mid-US. Our mileage went from 32mpg down to 18mpg. I90 is really straight, and some of the difference could be attributed to the elevation change, but there is no way it's all elevation, ethanol had a big impact and this was just the ~10% ethanol, not E85 or anything. We noticed improvements in mileage when we headed back west and got out of the corn belt even though by that time we were in Montana and now climbing mountains rather than coasting down them. Had we been using the ethanol crapoline we probably would have be down in the single digit economy range. But through the mountains we stuck around 18-20.

RE: Spin
By Drexial on 11/17/2011 10:50:21 AM , Rating: 2
$10,000 per vehicle that GM sells would be $84,761,920,000 in worldwide sales. For Ford it would 53,100,000,000 in worldwide sales.

That much money better result in some staggering fuel efficiency.

Even if its just an effect of US auto sales for would be getting $20,000,000,000 with a $10,000 a car price premium. GM would get around $30 billion from just the US market.

RE: Spin
By Kurz on 11/17/2011 10:53:17 AM , Rating: 2
Ever hear of diminishing returns?

RE: Spin
By YashBudini on 11/19/2011 7:29:34 PM , Rating: 2
then it is a given that the cost per vehicle will end up being more like $10,000 more per vehicle.

What was the 1975 price of a new technology catalytic converter?

What's the current price of a catalytic converter?

If ICEs are to continue to their logical development a future step will probably be the computer control of the valve train, through a CPU, more sensors, and advanced actuators. Like the original LCD TVs at $15,000 these vehicles will be very expensive, and probably not as reliable as they should be. Eventually manufacturers will obtain the knowledge, along with economies of scale, to make such valve trains reliable and less expensive. This is all the normal course of development. From $500 to $50 VCRs, from $500 to $29 DVD players, and Blu-Ray following along the same lines.

To say that cars will cost $10,000 more with improvements and then to neglect what's going to happen next is a half truth.

RE: Spin
By Masospaghetti on 11/20/2011 1:39:00 PM , Rating: 2
Exactly. Car prices will probably increase, but marginally - as the new fuel-saving technology becomes common, prices will fall quickly.

Remember back to 2005, when the Chevy Cobalt got 22/29 mpg with the automatic transmission? Now the bigger, heavier Cruze gets 26/39 and doesn't really cost much more, accounting for inflation. (I'm using post-2008 EPA numbers for both.)

If you had asked someone back in 2005 how much it would cost to improve economy by almost 35%, i'm sure they would have given a larger number than what actually happened.

RE: Spin
By cruisin3style on 11/16/2011 6:00:12 PM , Rating: 2
You're accusing Dailytech, that has an average of 2+ gaping grammatical errors per article of being biased based on the way they wrote a sentence??

Plus where is the bias in saying that the opposing side on this issue is ARGUING that the cost of the vehicle to consumers will rise?

Even the government admits they estimate the cost to the consumer will rise...

I doubt many people are reading this or any other article and thinking "man, increased fuel economy is gonna be awesome...but what is this increased cost business I keep hearing about?? Darn automakers and their completely unrelated and irrational price hikes!!"

clif notes: fail

RE: Spin
By lightfoot on 11/17/2011 6:07:33 PM , Rating: 2
It's not DailyTech that is spinning this, it is the government. The DailyTech author is just falling for the spin.

The government doesn't want to be blamed for these additional costs - if they did they would just tax the damn fuel. Instead they use clever little gimmicks like CAFE to shift the blame to industry so that the ill-informed masses will go out and protest the greedy businesses instead of directing their ire where it belongs: at the government.

People reading this article will understand that the increased CAFE standard will have cost implications. The problem is that the CONSUMERS in 2025 when they enter the dealership will not remember this. They will only blame the evil corporations for trying to gouge them on the price of a car.

RE: Spin
By FITCamaro on 11/17/2011 7:55:35 AM , Rating: 1
I just can't wait for how the Democrats are going to say we need a $10-15 minimum wage then because "poor people can't afford new cars anymore". Well guess who's fault it is that they can't afford new cars?! They claim $6000 in gas savings OVER THE LIFE OF THE VEHICLE. All this will do is continue to ruin car sales and make people hold onto their old cars longer. Not that thats necessarily a bad thing. But the only problem is that too many people don't take care of their cars.

At a GTO get together last night, one of the guys manages a Firestone store and showed us a picture of a brake rotor(well, what was left of one) on a Ford Explorer. There was literally almost nothing left other than the hub. There was about a 1/4 inch of jagged metal that wasn't even enough for the entire pad to sit on. I literally don't know how the car stopped. But that guy is out on the highway. He was in there for two new tires because he literally drove the other ones until they blew out.

RE: Spin
By Dr of crap on 11/17/2011 8:59:16 AM , Rating: 1
Then the govt will fix the loan process so EVERYONE will get approved to get a car loan.

ANd there you have the next credit bubble in the future!

Funny how those elected officals can't see the forest for the trees. But then again they don't go out and shop for their food or clothes, so the real things that you and I go through is so foreign to them - out of touch!

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