Last week President Obama announced a mandate forcing automakers to boost new-car fuel economy standards from 35.5 mpg in 2016 to 54.5 mpg in 2025. He claimed the new standards will save Americans $1.7 trillion over the lifetime of vehicles and $8,000 per vehicle by 2025.
Really? The Center for Automotive Research (CAR) has taken a look at the numbers. There are two ways to increase vehicle miles per gallon, reduce weight by 15% to 30% or add technology. Reducing weight and size reduces vehicle safety, increasing technology increase the cost of a vehicle. The most likely car company solution will be to increase technology, as reducing safety is not a good marketing strategy.
Marlo Lewis writing at Pajamas Media:
CAR estimates that a 56 mpg standard would impose on consumers a net loss (sticker price increase minus fuel savings) of $2,858 over five years if gasoline prices average $3.50/gallon. The 62 mpg that CARB, green groups, and (very likely) Obama preferred would impose a net loss of $6,525. Without regulatory coercion limiting our options, most consumers would avoid this “bargain.”
Long term, citizens will hang on to their existing vehicles, buying fewer of these government mandated vehicles. The cost impact will be even higher in California with the $5.00 a gallon gas resulting from CARB’s mandated low carbon fuel starting in 2012. CARB is determined to destroy the California economy with their hair brained regulations one gallon at a time.