The Obama administration has compromised and is willing to allow automakers to improve the fuel economy of future trucks and SUVs at a slower pace than cars. Plans have not been finalized but Government regulators hope to reach a deal by early next week on new rules that would nearly double mileage requirements to 56 miles a gallon by 2025.
There is a loop hole in this. Automakers like Ford and Chevrolet will be able to take longer to meet this initiative for their larger light trucks and pickups such as the Ford F Series and Chevrolet Tahoe.
The concession by the White House is aimed at easing widespread opposition to tougher mileage targets by automakers, including General Motors and Chrysler, which received government bailouts. Automakers seem to resisting embracing higher fuel-efficiency standards. With the potential to reduce carbon emissions, save fuel, save American families billions of dollars and cut oil imports by billions of barrels, aiding the goal of energy independence this ruling seems to be gaining momentum.
While the White House has already backed off a plan on proposal for fuel economy target of 60 mpg or higher they will not concede on the importance of Corporate Average Fuel Economy (CAFE). It is believed a higher standard could even help U.S. automakers become more globally competitive.
What the government proposes is probably for the common good. But there are huge costs involved. There’s no guarantee the entire US fleet in 2025 really can meet a 56 mpg standard. The administration hopes that guidelines for this ruling are ironed out by September 2011. The final rules could affect the competitive balance in the U.S. market.
Penske Automotive Group is watching this issue unfold very closely. As an eco-friendly business we believe there is a good chance we can achieve these standard however we realize there are challenges need to be ironing out in detail.
