NADA: Can Consumers Afford the Upfront Costs of Fuel Economy Hikes?
WASHINGTON (Nov. 16, 2011) – In response to the public release of the Model Year 2017-2025 proposal, the National Automobile Dealers Association (NADA) issues the following statement:
“America’s auto dealers support continuous improvement in the fuel economy of the fleet of vehicles that drive on the nation’s roads. To this end, we are concerned that adding about $3,000 to the average cost of a car will price millions of Americans out of the market, which could reduce fleet turnover and delay environmental gains.
“This regulation gambles that millions of consumers will be able to afford thousands more for generally smaller, more expensive vehicles that may not meet their needs. This policy is contrary to what most consumers are actually buying today, despite the wide availability of more fuel efficient models. We need fuel economy policies that encourage the sales of fuel efficient vehicles, instead of risky mandates that frustrate consumer demand and depress fleet turnover. The number one question that must be asked is: How many people will no longer be able to afford a new vehicle if the government raises the price of a new car by about $3,000? We will analyze the rule with this principal question in mind. We urge Congress to do the same.”
Average Vehicle Price Increase for Consumers from Obama Administration Fuel Economy Rules
MY 2011 $91 price increase (Source: NHTSA)
MY 2012-2016 $948 price increase (Source: EPA & NHTSA)
MY 2017-2025 $1,946 proposed price increase (Source: EPA)
Total Average Price Increase in 2025: $2,985
SUPPORT A BALANCED APPROACH TO NATIONAL FUEL ECONOMY STANDARDS
Preserve the Austria Amendment to FY12 Interior and Environment Appropriations Bill
Issue
The Administration’s fuel economy regime is structurally flawed and does not balance consideration of job loss, consumer choice and vehicle affordability when setting a fuel economy standard. EPA and the California Air Resources Board (CARB) are drafting the next round of national fuel economy rules three years early without direct authorization from Congress. While certain automakers have agreed “in principle” to raise the fuel economy standard to 54.5 mpg, the actual rule has not been written, or even subject to public comment. Since the cumulative effect of the Administration’s approach, on average, will cost consumers over $3,000 per vehicle, more scrutiny is necessary. The Austria Amendment would ensure the impact of fuel economy rules on job loss, consumer choice, and increased vehicle costs are properly evaluated to protect jobs and consumers.
Background
In 2007, Congress directed NHTSA to increase fuel economy by 40 percent under the CAFE program. However, under the guise of a “National Program”, in 2009 the Obama Administration added two new regulators, EPA and CARB, to regulate fuel economy. Currently three regulators write three different fuel economy rules pursuant to three different laws. The Administration has already set a 35.5 mpg standard by MY 2016 that would reduce greenhouse gas emissions by 960 million metric tons and save 1.8 billion barrels of oil. The auto industry has committed to meet this standard at a cost of $51.7 billion.
EPA and California regulators are attempting to bypass Congress again and are expected to propose a 54.5 mpg fuel economy standard this fall for MY 2017-25 vehicles. If adopted, by 2025, the Obama Administration’s fuel economy/global warming vehicle mandates will result in higher vehicle prices (over $3,000 on average).
NADA supports the Austria Amendment for MY 2017 and later to: (1) allow NHTSA to continue to regulate fuel economy according to the program Congress established; (2) bar EPA from spending funds on new duplicative fuel economy rules; and (3) prevent California from dictating national fuel economy rules, while not impacting any California emissions rules relating to criteria pollutants or smog.
Key Points
- Unless NHTSA is the sole fuel economy regulator, increased costs will hurt consumers, depress new car sales, and risk jobs. Because EPA and CARB do not balance job loss or consumer demand when setting a fuel economy standard, the new rules and their excessive costs will lower car sales, increase unemployment, and hurt some consumers’ ability to qualify for a new vehicle loan.
- Since the rules for MY 2017 and later do not need to be written for three more years, this amendment provides a “time out” while keeping fuel economy standards already on the books (including California’s) for MY 2012-2016. The auto industry is just starting to absorb last year’s $51.7 billion rule – the most expensive auto regulation ever mandated.
- The Amendment prevents duplicative fuel economy rules. NHTSA can continue to write fuel economy rules, but EPA cannot continue to waste millions in taxpayer funds on redundant fuel economy rules.
Status
In July, the House Appropriations Committee adopted the Austria Amendment to H.R. 2584 (FY12 Interior and Environment Appropriations bill, Sec. 453) by a vote of 27-20. In April, the House passed a permanent prohibition on EPA and California redundantly regulating fuel economy as part of H.R. 910 by a vote of 255-172.
Click here to download this issue sheet as a PDF.
House Passes Plan to Restore Single Fuel Economy Standard
WASHINGTON, April 9 — The U.S. House of Representatives passed, 255-172, a NADA-endorsed bill that would return the nation to a single fuel-economy standard that protects consumer choice and vehicle availability. H.R. 910, sponsored by Rep. Fred Upton (R-Mich.), supported NADA’s position that regulating fuel economy three different ways by three different agencies (EPA, NHTSA and California) under three different rules only pushes up vehicle prices and limits vehicle selection. (To read NADA’s letter to House members, click here.)
Efforts in the Senate to pass the companion bill were stymied a day earlier when lawmakers failed to overcome a procedural hurdle that would have allowed similar legislation to be considered. While 50 Senators supported the measure, it fell 10 votes short of what's needed pass. (To read NADA’s letter to the Senate, click here.)
The Senate is expected to reconsider this legislation in the future. NADA will continue to advocate for a single, national fuel-economy standard.
Dealers Support Passage of McConnell Amendment to Restore Single Fuel Economy Standard
WASHINGTON, March 30 — NADA today sent a letter in support of the McConnell amendment to S. 493.
America's auto dealers support the McConnell amendment because it would:
- End, after 2016, the current triple regulation of fuel economy by three different agencies (NHTSA, EPA, and California) under three different rules.
- Restore a true single national fuel economy standard under the CAFE program, with rules set by Congress, not unelected officials.
- Ensure jobs, consumer choice, and highway safety are considered according to federal law when setting a fuel economy standard.
- Save taxpayers millions of dollars by ending EPA’s duplicative fuel economy regime after 2016.
»
Letter to Republican Leader Mitch McConnell in Support of Amendment to S. 493Dealers Support Passage of Upton Bill to Restore Single Fuel Economy StandardWASHINGTON, March 15 - NADA has endorsed legislation currently under review by the House Energy and Commerce Committee that will better balance fuel and emissions reductions without needlessly increasing the cost of new cars and trucks. (
Read more)
EDITOR'S NOTE: H.R. 910 has passed the House Energy and Commerce Committee on a vote (34-19). On April 9, 2011, the House passed the Upton bill, 255-172.
WASHINGTON, March 1 – A redundant set of three fuel-economy standards could hurt auto sales by increasing costs and restricting vehicle availability—directly affecting the nation’s fragile economic recovery and hurting job creation, Alabama new-car dealer Forrest McConnell told a House Energy and Commerce Subcommittee today.
McConnell urged Congress to return to a single standard that takes into account national factors, such as jobs, safety and consumer demand as it will more effectively increase fuel savings, enhance economic growth and protect the environment. (
Read more)
"PATCHWORK PROVEN: Why A Single National Fuel Economy Standard Is Better For America Than A Patchwork of State Regulations"
View the Full Report Here (
37 pp. 325KB)
View Executive Summary Here ( 5 pp. 158KB)
|
State and Local Jurisdictions Seeking to Double-Regulate Fuel Economy
 |
"Patchwork Proven" demonstrates that a single, national fuel economy standard is the only fair and workable way to reduce fuel consumption and CO2 emissions from motor vehicles.
On March 1, 2010, then-NADA Chairman Ed Tonkin sent Senator Lisa Murkowski (R-Alaska) a letter in support of S.J. Res. 26, a resolution to disapprove of the EPA's endangerment finding on greenhouse gases. The letter can be downloaded here (PDF).
On June 9, 2010, NADA sent an updated letter to all Senators in support of S.J. Res 26. The letter can be downloaded here (PDF) .