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Automakers, Regulators Prepare for Midterm Fuel Economy Review

State-Level Targets, Consumer Tastes Add Complexity

Apr 18, 2016
The EPA’s demanding 54.5 mpg Corporate Average Fuel Economy (CAFE) standard continues to loom over the heads of automakers as the 2025 deadline approaches. Coming up in June, and continuing through 2017, is the midterm review of the targets and regulations, in which the auto manufacturers and state and federal regulators come together to review progress toward the goal and potential revisions to the rules or time line. The discussions are likely to be heated, Automotive News reports. Two aspects are going in the opposite direction the EPA is nudging the industry: the relatively low cost of fuel over the past two years and consumers’ shifting preferences in favor of crossovers and SUVs away from midsize sedans.
An additional complicating factor is the separate authority and sales mandates enacted by environmentally progressive states such as California, which has set an ambitious goal of 15 percent of all cars sold in the state be zero-emissions by 2025. More than a dozen other states have largely adopted California standards in terms of emissions regulation. Automakers claim customers broadly want improved fuel economy but are often loathe to pay a higher upfront cost for it if they don’t see an immediate and obvious benefit. Although significant gains have been seen from incremental technology improvements to internal combustion engines such as engine downsizing, direct fuel injection and turbocharging, cylinder deactivation and auto stop-start, some believe electrification in the form of hybridization will likely be inevitable on future vehicles to meet the standards.
A Republican administration could conceivably change the CAFE standards under a new appointed administrator. Former President George W. Bush originally called for CAFE standards of 35 mpg by 2020 in 2007. Under the Obama administration, CAFE targets were substantially increased, calling for a 54.5 CAFE standard by 2025.
Source: Automotive News

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