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Fuel economy rules to get tougher

July 28, 2011: 2:00 PM ET
Small cars like the Ford Fiesta, as well as hybrids and electric cars, will play an important role as fuel economy requirements tighten.


NEW YORK (CNNMoney.com) -- President Obama plans to announce an agreement tomorrow on a new round of fuel economy standards for cars and trucks that would require mileage gains through the year 2025.

The proposal is expected to call for all passenger vehicles sold in 2025, combined, to average 54.5 miles per gallon, or nearly double the current figure. They'd ramp up to that level over seven years, starting in 2017 when current rules end.

Environmental groups had been pushing for a 60 mpg fuel-efficiency requirement but industry representatives objected that meeting such a high standard would be too costly.


Each automaker will be given fuel economy targets tailored to the types of vehicles it sells. Automakers like Ford (F, Fortune 500) and Toyota (TM) that sell large trucks and SUVs as well as small cars and hybrids might be given a lower fuel economy target than automakers like Honda (HMC) and Hyundai (HYMTF) that sell no large trucks. And Ford, say, could offset sales of a few V8-powered Mustangs with sales of popular Fiesta subcompacts.

Still, fuel efficiency requirements for pick-up trucks and SUVs would rise more gradually than those for cars. Cars would be required to average a 5% improvement in fuel economy each year from 2017 through 2025, while trucks would only need to rise 3.5% a year through 2021.

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Tougher for smaller car makers





To meet the standards, automakers will likely charge more for gas guzzlers, said Motor Trend magazine editor-in-chief Angus MacKenzie.

"A simple rule of thumb is the bigger and less efficient a vehicle is, the more expensive it's going to become," he said.

Higher car prices will be a major concern for consumers, said Jeremy Anwyl, chief executive of the automotive Web site Edmunds.com, in a draft of a letter he sent to the EPA. Anwyl expressed frustration with the secretive nature of the government's discussions with automakers and environmental groups in preparing the new rules.


The biggest challenge will be meeting the demands of American car buyers, who expect fuel economy without substantial compromises, said McKenzie.

"The industry can build these cars, no problem," he said, "but will American consumers want to buy them or drive them?" To top of page

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