The auto industry is looking for a break as fuel economy standards are poised to become even tighter.
So far, automakers are meeting tougher emissions and fuel economy standards, but between 2018 and 2025 those standards get much tougher.
Assumptions made in 2012 about gas prices and consumers’ willingness to embrace costlier, but more fuel-efficient hybrid, electric and plug-in cars haven’t exactly panned out to the degree expected.
So, the industry wants existing standards to reflect current gas prices and lower projections of hybrid and electric vehicle sales. The industry also wants changes to what it believes are unrealistic regulations in California and nine other states for zero-emission vehicles.
Regulators have signaled they are unlikely to budge, and environmentalists say automakers are already slipping back into old, bad habits under the current standards.
Two federal regulatory agencies, joined by one from California, will issue a draft report that will vastly influence the kinds of cars and trucks that will coming to auto dealerships.
The report, to be issued jointly by the National Highway Traffic Safety Administration, the U.S. Environmental Protection Agency and the California Air Resources Board, will kick off a yearlong review process. Originally, the report was expected by the end of June. Now, insiders say it could be published as early as this week.
Those agencies based the original fuel economy and greenhouse gas targets on fuel prices that are much higher than the $2 per gallon prices Americans have enjoyed over the past year.
At $2 per gallon, it takes consumers up to eight years to recoup an investment into a fuel-efficient vehicle that costs just $1,800 more than a conventional vehicle, “well beyond what most consumers consider worthwhile when buying a new vehicle,” according the Alliance for Automotive Manufacturers.
In 2012, automakers agreed that by the 2025 model year goal they would all achieve a fleet-wide average of 54.5 miles per gallon — or an adjusted real-world average of about 40 mpg — and cut tailpipe carbon dioxide emissions by 35% on the cars and trucks that they sell.
While electric vehicles hogged the headlines for several years as a plethora of new vehicles were developed automakers also dramatically improved the fuel economy of small cars, crossovers, SUVs and pickups by improving the performance of gas-powered engines, developing transmissions with more gears and reducing the weight of their vehicles.
The industry says U.S. regulators have underestimated the cost and difficulty of achieving their vehicle fuel-economy and greenhouse-gas targets for 2025 and are giving California too much power to shape the country’s policies on those issues.
What’s more, the regulatory requirements adopted in 2012 were set up to become more aggressive from 2018 to 2025.
Sales of new hybrid, plug-in hybrid, electric and hydrogen-powered vehicles in the U.S. have increased in recent years but accounted for less than 3% of total industry sales in 2015 and have dropped for the past two years. Meanwhile and vehicles with gasoline powered engines account for 94.7% of vehicles last year, according to the alliance.