WASHINGTON - President Barack Obama announced an agreement with 13 automakers to increase the corporate average fuel economy (CAFE) standard to 54.5 miles per gallon for cars and light-duty trucks by model-year 2025.
The new program would increase the passenger car fuel-economy standard by 5 percent each year, from 2017 to 2025. The standard for pickup trucks and other light-duty trucks would increase by 3.5 percent per year for the first five years and 5 percent for the last four model-years.
Although the agreement specifies 54.5 mpg as the goal, the actual wording states “performance equivalent to 54.5 mpg or 163 grams/mile of CO2." The Obama administration claims Americans will save $1.7 trillion dollars in fuel costs. Average fuel savings claimed will be more than $8,000 per vehicle by 2025. The administration also claims these new standards would cut more than 6 billion metric tons of greenhouse gases emitted during this program.
Also, the EPA and NHTSA are considering incentive programs to encourage adoption of fuel-saving and emissions-reduction technologies, including the following:
- Incentives for electric vehicles, plug-in hybrid electric vehicles, and fuel cell vehicles
- Incentives for advanced technology packages for large pickups, such as hybridization
- Credits for technologies with potential to achieve CO2 reductions and fuel-economy improvements not captured by standard test procedures
In addition, the EPA said it plans to propose provisions for:
- Credits for improvements in air conditioning (A/C) systems
- Treatment of compressed natural gas (CNG)
- Continued credit banking and trading, including a one-time carry-forward of unused MY 2010-2016 credits through MY 2021.
Companies and organizations involved in development of the proposed standard include Ford, GM, Chrysler, BMW, Honda, Hyundai, Jaguar/Land Rover, KIA, Mazda, Mitsubishi, Nissan, Toyota, and Volvo, the United Auto Workers Union, and the State of California.
The administration also releaed a new report entitled Driving Efficiency: Cutting Costs for Families at the Pump and Slashing Dependence on Oil, related to this initiative.