Obama Announces 54.5 mpg Fuel Efficiency Standard

The agreement with 13 automakers is expected to save consumers $1.7 trillion at the pump by 2025.

August 01, 2011

WASHINGTON - President Obama announced on Friday an agreement with 13 major automakers to pursue the next phase in the his administration??s national vehicle program, increasing fuel economy to 54.5 miles per gallon for cars and light-duty trucks by model year 2025. The president was joined by Ford, GM, Chrysler, BMW, Honda, Hyundai,Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota and Volvo - which together account for more than 90% of all vehicles sold in the United States - as well as the United Auto Workers (UAW) and the State of California.

"This agreement on fuel standards represents the single most important step we??ve ever taken as a nation to reduce our dependence on foreign oil," said President Obama. "Most of the companies here today were part of an agreement we reached two years ago to raise the fuel efficiency of their cars over the next five years. We??ve set an aggressive target and the companies are stepping up to the plate. By 2025, the average fuel economy of their vehicles will nearly double to almost 55 miles per gallon."

Building on the Obama administration??s agreement for MY 2012-2016 vehicles, which will raise fuel efficiency to 35.5 mpg, the next round of standards will require performance equivalent to 54.5 mpg or 163 grams/mile of CO2 for cars and light-duty trucks by MY 2025. Achieving the goals of this agreement will rely on innovative technologies and manufacturing that would spur economic growth and create high-quality domestic jobs in cutting edge industries across America.

These programs, combined with the MY 2011 light truck standard, represent the first update to fuel efficiency standards in three decades and span MYs 2011 to 2025. Together, they could save American families $1.7 trillion dollars in fuel costs, and by 2025 result in an average fuel savings of more than $8,000 per vehicle. Additionally, these programs could cut U.S. oil consumption, saving a total of 12 billion barrels of oil, and by 2025 reduce oil consumption by 2.2 million barrels a day - as much as half of the oil the U.S. imports from OPEC every day.

The standards also curb carbon pollution, cutting more than 6 billion metric tons of greenhouse gas over the life of the program - more than the amount of carbon dioxide emitted by the United States last year. The oil savings, consumer and environmental benefits of this comprehensive program are detailed in a new report, Driving Efficiency: Cutting Costs for Families at the Pump and Slashing Dependence on Oil.

"These standards will help spur economic growth, protect the environment, and strengthen our national security by reducing America??s dependence on foreign oil," said U.S. Transportation Secretary Ray LaHood. "Working together, we are setting the stage for a new generation of clean vehicles."

The EPA and National Highway Traffic Safety Administration are developing a joint proposed rulemaking, which will include full details on the proposed program and supporting analyses, including the costs and benefits of the proposal and its effects on the economy, auto manufacturers, and consumers. After the proposed rules are published in the Federal Register, there will be an opportunity for public comment and public hearings. The agencies plan to issue a Notice of Proposed Rulemaking by the end of September 2011. California plans on adopting its proposed rule in the same time frame as the federal proposal.

Given the long time frame at issue in setting standards for MY 2022-2025 light-duty vehicles, EPA and NHTSA intend to propose a comprehensive mid-term evaluation. Consistent with the agencies?? commitment to maintaining a single national framework for vehicle GHG and fuel economy regulation, the agencies will conduct the mid-term evaluation in close coordination with California.

In achieving the level of standards described above for the 2017-2025 program, the agencies expect automakers?? use of advanced technologies to be an important element of transforming the vehicle fleet. The agencies are considering a number of incentive programs to encourage early adoption and introduction into the marketplace of advanced technologies that represent "game changing" performance improvements, including:

  • Incentives for electric vehicles, plug-in hybrid electric vehicles, and fuel cells vehicles;
  • Incentives for advanced technology packages for large pickups, such as hybridization and other performance-based strategies;
  • Credits for technologies with potential to achieve real-world CO2 reductions and fuel economy improvements that are not captured by the standards test procedures.
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