The Obama administration has been working on cracking down on fuel efficiency standards for some time now, but they have finally released the tab the automotive industry will have to pay to meet the 54.5 mpg standard by 2025.
The regulation, one of the biggest in U.S. history, will run $157.3 billion, in addition to the 2012-2016 requirement costs of $51.5 billion to get fleets up to 34.1 mpg. Light trucks will suck up $44 billion, while the rest of the $113 million increase will go towards passenger cars.
Where does this leave the consumer? Out about an extra $2,023 on average per car, a figure that can hit up to $2,800 depending on who releases the figures.
No prediction has been made from the Obama administration on the impact on sales numbers the change will have, but according to some analysts the only reason there would be a decline is if people didn’t see the value in paying extra for the fuel economy. The Obama administration’s side is that the benefits outweigh the costs by saving at the pump, but base this fact on ‘lifetime’ fuel savings.
Costs to each brand are as follows: General Motors Co. $37.8 billion, FoMoCo. $29.4 billion, Chrysler-Fiat $9.7 billion, Toyota Motor Corp. $23.2 billion, Honda Motor Co., $15.3 billion, Nissan Motor Co, $15 billion, VW $1billion, Hyundai Motor Co, $8.2 billion, and Kia up by $1.4 billion.
Mitch Bainwol, president & CEO of the Alliance of Automobile Manufacturers, said the administration “must consider that technology breakthroughs will be required and consumers will need to buy our most energy-efficient technologies in very large numbers to meet the goals.”
“Automakers have already invested billions of dollars in new technologies, so consumers now have many choices when shopping for fuel-efficient vehicles,” said Bainwol, who heads the group representing GM, Ford, Chrysler, Toyota, VW and seven others.
– By: Alexandra Koken
Source: Detroit News