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2021-25 CAFE Standards: The Battle Begins

Aug. 2, 2017
Carmakers and the Trump administration want to roll back 2025 fuel economy standards, while consumer advocate groups say engineers are fully capable of meeting the standards agreed to in 2012.

Driven primarily by federal technology-forcing regulations mandating increases in fuel economy and a reduction of pollutants  under the Clean Air Act, today’s vehicles are chock-full of ICs, software, and engines that completely or in part run on electricity rather than internal combustion.

Under current rules, adopted under the Obama administration as part of an agreement reached with major vehicle manufacturers  in the summer of 2011,  the fleet-wide average fuel economy target is about 41 miles per gallon in 2021, and nearly 50 miles per gallon in 2025. Final rules for the 2022-2025 model year rules must be completed by April 2018.

Earlier this week, however, the U.S. Department of Transportation (DoT) said it may revise Corporate Average Fuel Economy (CAFE) standards starting with the 2021 model year—a year earlier than previously planned—and could adopt lower standards through 2025. This follows President Trump’s ordering a review of U.S. vehicle fuel-efficiency standards in March.

A new environmental impact statement also is in the works. That possibility prompted the Alliance of Automobile Manufacturers, a trade group representing major carmakers, to say in a statement that the environmental review “must happen regardless of what future standards are.”

Basically, the auto industry claims the present rules are too costly and consumers won't accept the resulting higher price of vehicles. Automakers also have said the Obama administration did not conduct a proper review to ensure that the current rules are feasible.

In an attempt to counter automakers’ efforts to freeze vehicle fuel economy standards at their current level, on Monday, the Consumer Federation of America (CFA)—a non-profit organization founded in 1968 and comprised of nearly 300 consumer-oriented non-profits (including the Consumers Union, state and local consumer organizations and protection agencies, credit unions, rural electric cooperatives and others)—released data declaring that the value of fuel savings from higher miles per gallon performance outweighs the added cost of vehicles with fuel-saving technology.

CFA compared the price and fuel efficiency of 27 all-new 2017 vehicles, of which there are 79 versions, and found:

  • 27% (21) of the “all-new” vehicles introduced in 2017 actually cost less than their 2011 versions and got 1-10 MPG better fuel economy.
  • When calculating five years of fuel costs, nearly half of these 2017 vehicles cost less to buy and fuel than their 2011 counterparts.
  • While 58 of the 79 vehicles increased in price, 15% (12 of 79) had fuel savings that offset the entire price increase and 52% (41 of 79) had fuel savings that offset the increased cost of fuel-saving technology.
  • 6% (5 of 79) were more expensive in 2017, but their fuel economy stayed the same or decreased from 2011.
  • Looking at the cost/benefit average for these 79 all-new models, the added cost of fuel economy averaged $320 per vehicle and will save the buyer an average of $946, putting $626 back into consumer pocketbooks.
  • Auto manufacturers are making good progress in complying with the law: 70% of the “all-new” 2017 vehicles had a CAFE-compliant trim, compared to 41% of the “all-new” 2015 vehicles.
  • Six vehicles are compliant all the way to Model Year 2025.
  • So-called “gas guzzlers”—vehicles getting below 14 MPG—were only 0.4% of the total in 2017, down from 8.5% in 2011.
  • 78% of the “all-new” light duty trucks were CAFE compliant for 2017.
  • Comparing the sales figures for 2016 SUVs and light duty trucks with the 2011 models, those that increased the fuel efficiency by over 10% sold nearly 20% more vehicles than those with a less than 10% increase in fuel efficiency.
  • 15 of the 17 manufacturers improved their CAFE compliance rate from 2015 to 2017, demonstrating that the industry is up to the task of meeting higher standards, according to CFA.

CFA officials claim vehicle manufacturers are being short-sighted in view of their ability to comply so far with the CAFE standards, and to do so with great savings for consumers. They also point to a positive impact on sales (20% greater sales for SUVs/light trucks, with more than a 10% increase in fuel economy). CFA further cites the need for automakers to develop technology to remain competitive in other parts of the world with high fuel-efficiency standards.

The CFA study concluded: “Rolling back the standards at this point would not only hurt America’s already financially beleaguered consumers, but they would hamper vehicle sales and put U.S. car companies at a distinct competitive disadvantage to the Asian carmakers who will meet the standards. As has been proven during the first five years of the reinvigorated standards program, automotive engineers are fully capable of meeting the very standards agreed to in 2012 and consumers save money in the process.”

Whatever changes come or do not come, they won't have an immediate impact. For one thing the EPA will need to conduct a lengthy public review process. For another, Congress will want to have its say. Indeed, there  is pending legislation in the Senate (bill 1273, “The Fuel Economy Harmonization Act”) authored by Sen. Roy Blunt (R-Mo.) and co-sponsored by Sen. Debbie Stabenow ( D-Mich). and four other Senators,  making it easier for automakers to comply with CAFE standards.

Advocates say it would smooth out differences between U.S. EPA and National Highway Traffic Safety Administration (NHTSA) requirements, bringing consistency to the practice of transferring fleet wide credits earned under the two different emissions programs. The bill removes caps on the amount of fuel mileage credits automakers can transfer between car and light-truck fleets, in line with EPA rules. It also would allow auto companies to earn NHTSA credits for “off-cycle” technologies, such as stop-start, going back to 2012.

Environmental groups claim the proposed legislation could end up giving automakers looking for help complying with the requirements an easy way out, ultimately increasing fuel use and tailpipe emissions.

Finally, there will be the inevitable barrage of lawsuits challenging any revisions in court from environmental groups, and possibly from states such as California that have set their own standards for emissions. Resolving the court battles alone is likely to take years.


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