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54.5 mpg the New Reality

August 28, 2012 by Michael J. Stanton - President and CEO

Today, the Obama Administration issued the new fuel economy rules, setting the overall MY2017-2025 Greenhouse Gas/CAFE standard at a fleet average 54.5 mpg. The new standard is one of the biggest challenges facing the industry. However, Global Automakers’ members are already working to achieve higher fuel economy. Our members have developed various advanced technology vehicles and are in the process of researching and designing cars that will help reach the new fleet average target of 54.5 mpg.

The biggest obstacle to achieving the new CAFE standard will be consumer acceptance. Hybrids have been in the market for more than 10 years and are thought to be mainstream by most. However, hybrids are still in the earliest phase of consumer acceptance. Only a small percentage of cars on the road today are hybrids, and the sales rates for hybrid cars (2.75 percent of the market in 2011) are not significantly increasing.

Even if we can get the fuels right, the infrastructure right and the technology right, the consumer is the key piece of the puzzle. Because of the consumer wildcard, we have worked diligently with the EPA, DOT, California and other stakeholders to ensure that the new rules contained a midterm review. These CAFE standards cover the next 14 years and there is uncertainty about technology and infrastructure, in addition to consumer acceptance. The mid-term review will allow the government to adjust the standards for MY2022-2025 as appropriate.

Explore our Driving Fuel Economy site where we aim to paint a realistic picture of consumer acceptance of newly developed technologies. Stay in touch by tweeting us your reactions and thoughts at @GloblAutomkrs by using the hash tag #CAFE2025. You can also follow the conversation at Facebook.com/GlobalAutomakers.