New Fuel Economy Standards

Earlier today, President Obama announced a proposed new policy for stricter fuel economy that moves beyond existing CAFE standards. Here is a quick breakdown of the facts:

• 5% increases in efficiency from 2012-2016, culminating with an industry average of 35.5 mpg (30 mpg for light trucks) by 2016


• 1.8 billion barrels of oil preserved


• Projected reduction of 900 million metric tons of greenhouse gas emissions (the equivalent of 177 million fewer cars on the road)


• Policy embraced by ten major car companies and the UAW


• Matches California's target so states no longer need to apply for waivers to enforce stricter standards


• Increased costs of $1,300 per vehicle (expected to be offset by fuel cost savings)

Source: EPA, 2008

As a comparison, check out the graphic to the right, which plots historical data for fuel economy beginning in the year 1975. Despite rapid growth in the 1970s, this will be the first significant increase since that time. This, of course, neglects to acknowledge vehicle efficiency, which unlike fuel economy has steadily increased over the entire period since 1975. It's an important distinction and our obsession with powerful, oversized vehicles is part of the reason why we lag so far behind Europe in the race to better fuel economy. Is it too little too late? For more information, I encourage you to check out the full report on automotive technology and fuel economy trends at the EPA website.

See the entire transcript of the President's remarks here.