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U.S. regulators say it isn't a big deal, since consumers will save on fuel over the vehicle's lifetime

A National Automobile Dealers Association (NADA) official said a new Corporate Average Fuel Economy (CAFE) proposal could add as much as $5,000 to the sticker price of a new vehicle.

The new CAFE proposal aims to increase the average fuel economy of cars and light trucks sold here in the U.S. to 54.5 mpg by 2025 in an effort to reduce greenhouse gas emissions and lessen the country's dependency on foreign oil.

Don Chalmers, chairman of NADA's government relations committee, announced in a Detroit hearing for the proposal that nearly doubling today's fuel economy standards would force manufacturers to use expensive "fuel-saving technologies" that would bump up the sticker price of a new vehicle an extra $5,000. NADA is expected to release a study next month showing that the costs for the new higher fuel-economy standards will overshoot government estimates by over 60 percent (meaning an extra $5,000 to the sticker price for new 2025 models).

Chalmers argued that an extra $5,000 would put many potential buyers out of the new-car market because it could add another $60 to $70 to a monthly car payment and hurt a customer's chance to receive financing.

"I want to sell more fuel-efficient cars," said Chalmers. "If the customer can't get financing, it makes no difference."

U.S. regulators see the situation differently, though. Many believe the extra $5,000 wouldn't be an issue because customers save on fuel over the lifetime of the vehicle.

"We're hearing broad support," said Margo Oge, director of the Office of Transportation and Air Quality at the Environmental Protection Agency. "What we heard is that this standard will create green jobs. This is what the consumer wants. This is where the companies want to invest. So, overall, it's been very positive."

Other supporters for the new CAFE proposal by the Obama administration include 13 major automakers, such as Ford Motor Co., General Motors, and Chrysler; United Auto Workers (UAW), and environmental groups like the National Wildlife Federation.

"These proposed rules will reduce the pollution that contributes to climate change, significantly reduce America's dependence on foreign oil and save American families money at the pump," said Bob King, UAW President, who added that the proposal could save customers around $4,000 over the life of the vehicle. "They will also create jobs in the auto industry and throughout the economy."

"This proposal provides our industry both a single program moving forward, as well as regulatory framework that enables manufacturers to plan and invest for the future with confidence," said Sue Cischke, Ford Motor Co.'s vice president of sustainability, environment and safety engineering. "We are committed to working with you to finalize these regulations. The standards proposed are aggressive, but so are the demands from our customers for greater fuel efficiency."

Others, such as Volkswagen AG and Daimler AG, are on Chalmers' side with opposing the new CAFE proposal. They say the new proposal offers "no new incentive for diesel cars."

The hearing for the proposal was one of three that will be held to give the public a chance to comment. The other two are scheduled for January 19 in Philadelphia and January 24 in San Francisco.

Source: Automotive News

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By Jedi2155 on 1/19/2012 5:29:47 AM , Rating: 2
CARB (California Air Resource Board) has many scenarios on expected new vehicle purchases. 2025 is still optimistic to say most vehicles won't be Gas (or Diesel).

Here is one (of many)scenario

I feel price is still the biggest hurdle but by 2020, I expect an EV to be comparable in everyone single aspect to a Gas powered vehicle. Other factors though, will still make gas powered vehicles more desirable (high MPG will make cost to fuel less of a factor), quick fill up etc.

I do not believe our electric infrastructure to be able to handle 40% EV's at its current state BUT there is plenty of capacity right now. California can handle up to 2 million simultaneous EV's through SPARE capacity during the night no problem (that's 6.6 to 20 gigawatts), and if we use other generation and import power from other states. However 2 million though, is just 1/16th of the 32 million vehicles registered in California alone. Each new average (3 GW) nuclear plant though, can handle another million or so we can easily expand provided we will build that.

Still, I think a good healthy mix is the best way to handle our future transportation needs, but EV's are still in their infancy stage. I'm doing my part, just ordered my Volt last weekend :D.

By PrinceGaz on 1/19/2012 9:22:49 AM , Rating: 1
Not every EV needs to be fully charged every night.

In fact according to some research I've just made up, current EVs with 100 mile range on average only require 28% charge each night, so provided the charging points are designed to use power intelligently that means there is capacity to cope with 3.5x as many vehicles; so the spare Californian capacity could handle 7 million vehicles rather than only 2 million.

Unless all 7 million EV owners all decide to go out one day and fully drain their batteries.

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