What Do Obama’s New Fuel Economy and Emissions Standards Mean for Automakers?



After decades of hemming and hawing, the U.S. government has finally hashed out concrete fuel economy and emissions standards for cars and light trucks. The new rules, generated by the National Highway Traffic Safety Administration and Environmental
Protection Agency, are contentious, to say the least. Here’s why.

Beginning with 2012 model vehicles, automakers have to improve the fuel economy of their fleets and cut greenhouse gas emissions by about 5% each year through 2016. That means 2016 model year vehicles will need to meet an estimated combined average emissions level of 250 grams of carbon dioxide–a requirement that will bring vehicles up to an average of 35.5 mpg if all carbon reductions come directly from improvements in fuel efficiency. More specifically, cars will average out to a target of 37.8 mpg by 2016, and pickups, minivans, and SUVs will
average 28.8 mpg. The EPA will also allow automakers to each credit 200,000 of their EVs as having a 0 gram rating for CO2 (read: zero emissions rating) through 2016. Any EVs over the 200,000 cap will have to take into account the CO2 generated from electricity used in charging. It’s a fairly low cap–Nissan will build 150,000 of its all-electric Leaf vehicles in 2012 alone–but lawmakers believe that emissions generated from electricity production have to be taken into account at some point.

The most intriguing part of the whole thing? Fuel efficiency isn’t
king–it’s all about greenhouse gas reductions. This is probably the
EPA’s attempt at preparing for a future where most vehicles aren’t just
juiced up by gasoline. Carmakers shouldn’t necessarily get off
scot-free if their EVs are ultimately powered by coal-fired electricity
plants, after all.


Most environmentalists are ecstatic about the announcement, which will save 1.8 billion barrels of oil and cut down on 960 million metric tons of greenhouse gas emission. The downside? Obama’s rules will tack on $926 to the cost of purchasing a car within five years, and cost automakers a staggering $52 billion to get up to speed with regulations. Still, the NHTSA rationalizes that people who buy a 2016 model year car will save $3,000 over the life of the vehicle thanks to fuel efficiency improvements. As for automakers, they’ll just have to suck it up.

So far, reactions from the auto industry (and auto dealers) have been mixed. The AP reports that Ed Tonkin, the car dealer in charge of the National Automobile Dealers Association, called the rules “the most expensive fuel economy mandates in history. Tonkin also warned that rising vehicle prices will prohibit many Americans from buying new cars. But in a response to an earlier piece about the fuel efficiency rules, Scott Monty, Ford’s head of social media, rationalized, “One of the ways we’re addressing this issue at Ford is by making fuel
efficiency affordable for all. With every new vehicle that we launch,
we’ve committed to being best in class in fuel economy. Lighter weight
and higher strength steel allows customers to save at the pump while
our vehicles can still achieve 5-star crash ratings.”

In the end, we have to side with the U.S. government, which assures us that “Although the standards can be met with conventional technologies, EPA
and NHTSA also expect that some manufacturers may choose to pursue more
advanced fuel-saving technologies like hybrid vehicles clean diesel
engines, plug-in hybrid electric vehicles, and electric vehicles.” Any ruling that gives automakers the much-needed kick in the pants to switch their fleets over to hybrids and EVs is alright by us.


About the author

Ariel Schwartz is a Senior Editor at Co.Exist. She has contributed to SF Weekly, Popular Science, Inhabitat, Greenbiz, NBC Bay Area, GOOD Magazine and more