Since embracing tough new fuel economy standards in 2012, automakers have spent billions to develop more fuel-efficient vehicles and have been so successful at meeting tougher regulations they?ve become victims of their own success.
Over the past four years, automakers deployed new cars and trucks with gasoline direct injection, more sophisticated transmissions, found ways to cut gobs of weight, improved aerodynamics and developed stop-start systems that reduce fuel consumption by eliminating idling.
Now automakers are pleading for a break on even more aggressive standards that will go into effect between 2022 and 2025.
Automakers have been aggressively lobbying the U.S. Environmental Protection Agency, the National Highway Traffic Safety Administration and Congress to lower the standards. The lobbying is part of a midterm evaluation of corporate average fuel economy standards intended to limit greenhouse gas emissions and dependence on foreign oil by improving fuel economy.
Enacted in 1975 as a result of the OPEC oil embargo and finalized in 2012, the CAFE target real world fuel economy for passenger vehicles is about 41 mpg by 2025. The unadjusted target is 54.5 mpg.
The problem for automakers is they have proven over the past four years that they?re able to meet tougher future standards.
?Manufacturers are adopting CO2-reducing technologies very rapidly. In fact, we are seeing technologies that reduce emissions and improve fuel economy entering the fleet at faster rates than we originally expected,? Janet McCabe, acting assistant administrator for the U.S. EPA?s office of air and radiation, said at a congressional hearing last month.
McCabe said automakers already have introduced more than 100 car, SUV, and pickup models that already meet 2020 or later standards.
?Carmakers can meet the standards at similar or lower costs than we had anticipated in our 2012 analysis,? she said.
Without changes, automakers say the industry could lose sales, profits, cut jobs, fail in its effort to sell vehicles that cost more to consumers and, ultimately, fall short of reaching the environmental benefits the government is trying to achieve.
?We are bumping up against this affordability limit with the consumer,? said Jeff Carlson, chairman of the National Automobile Dealers Association. ?If we can?t sell the cars, if we can clear the fleet, we are never going to get to the fuel economy targets.?
Paul Hemmersbaugh, chief counsel of the traffic safety administration, also argued automakers have proven they are capable of meeting stricter future standards when he testified before Congress.
?Under current standards, stringency levels have been increasing steadily since model year 2012, and manufacturers have been meeting those standards,? Hemmersbaugh said. ?That means consumers are buying, and benefiting from, more-efficient vehicles with lower greenhouse gas emissions, and saving money on fuel costs.?
The EPA and NHTSA, along with the California Air Resources Board, issued a 1,200-page report on July 18 that kick-started a review of the standards that is expected to take nearly two years.
The agencies repeatedly say the initial report is not a policy or regulatory document. At the same time, the report signals that the agencies are opposed to adopting any major changes to the regulations.
?Our new analysis confirms that the standards can be met largely with more efficient gasoline-powered cars,? Hemmersbaugh said.
Another reason the government may be reluctant to amend the regulations is that the new CAFE and emission standards are among the signature achievements of President Barack Obama?s administration.
?As model year 2017 vehicles reach showrooms, the Obama administration?s fuel economy program has already reduced carbon pollution emissions significantly and has saved Americans a lot of money at the pump at the same time,? McCabe said.
Mitch Bainwol, president and CEO of the Alliance for Automobile Manufacturers, argues that the industry?s ability to meet tougher standards over the past four years doesn?t ensure success in the future.
Bainwol told Congress that the final four years of the program impose an expectation of fuel economy gains of about 5 percent per year for both cars and trucks.
?The agencies have repeatedly stated that compliance with the model year 2025 standards will not require significant hybridization or electrification, but that clearly seems to reflect a leap of faith that transcends current technology realities,? Bainwol said.
Automakers, environmental groups and others were given 60 days to react and respond to the report ? a time frame the auto industry said was too short. Automakers asked for an extension but both the EPA and NHTSA denied the request.
The next step for the agencies is to review the comments received during the 60-day period and to issue a proposal sometime next year. Then the agencies will again solicit input and issue a final report by April 1, 2018, at the latest.