INFOGRAPHIC: Understanding the MY17-25 Fuel Economy Increases
Triple Regulation of Fuel Economy
A Flawed Fuel Economy Structure Produces a Flawed Result
Summary: The finalized Model Year 2017-2025 fuel economy regulations hike the fuel economy standard to 54.5 mpg by 2025. Aside from raising the average price of a vehicle by about $3,000, this regulation continues the triple regulation of fuel economy by three different regulators (NHTSA, EPA, and the California Air Resources Board). This rule is the most expensive ($157 billion) auto regulation of all time, and does not address its impact on auto sales or jobs.
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Issue |
Result |
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Average Price Increase for Consumers |
The average price of a new vehicle will increase by about $3,000 in 2025 due to the new fuel economy/global warming vehicle mandates enacted by the Administration.
Model Year 2011 rule $95 price increase [1]
MY 2012-2016 $945 price increase [2]
MY 2017-25 $1,896 price increase [3]
Total Average Vehicle Price Increase: Approximately $3,000 |
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Auto Loans |
6.8 million licensed drivers will be unable to qualify for an auto loan and shut out of the new car market because of the regulatory cost of these rules when fully implemented. [4] |
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Total Costs |
MY 2011 – $1.46 billion [5]
MY 2012-16 – $51.5 billion (most expensive auto regulation of all time) [6]
MY 2017-25 – $157 billion (most expensive proposed auto regulation of all time) [7]
Total cost of the Administration's fuel economy rules: $209.96 billion |
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Affordable Vehicles |
Vehicles that currently cost $15,000 and less will be regulated out of existence. [8] |
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Size of vehicles |
Mass reduction of up to 20 percent relative to MY 2008 levels. [9] |
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Type of vehicles |
15% of vehicles sold will be hybrid or electric. [10]
Even with tax credits and other government incentives (e.g. HOV lanes and reserved parking spaces), less than 1% of the fleet is hybrid, and hybrids have never been more than 3% of annual sales. |
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Number of Fuel Economy Regulators |
Three – NHTSA, EPA, and the California Air Resources Board. Each rule is different and must be complied with separately. Note: Congress has only specifically authorized NHTSA to regulate fuel economy. EPA has wasted $25 million since 2007 redundantly regulating fuel economy. [11] |
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Sales Impact |
The Administration’s proposed regulation declines to “provide quantified estimates of potential sales impacts.” [12] |
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Job Loss |
The Administration’s proposed regulation states: “Since the impact of this proposal on sales is unknown, and sales have the largest potential effect on employment, the impact of this proposal on employment is also unknown” (emphasis added). [13] |
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Actual Rule Due Date |
April 1, 2015. The Administration has announced the rule will be finalized by July 2012, or nearly three years early. |
[1] 74 Fed. Reg. 14413 (Mar. 30, 2009) – prices adjusted to 2010 dollars
[2] 75 Fed. Reg. 25635 (May 7, 2010) – prices adjusted to 2010 dollars
[3] 76 Fed. Reg. 74889 (Dec. 1, 2011) – prices adjusted to 2010 dollars
[4] David Wagner et al, The Effect of Proposed MY 2017-2025 Corporate Average Fuel Economy (CAFE) Standards on the New Vehicle Market Population, NADA, pg. 5, (Feb. 13, 2012).
[5] 74 Fed. Reg. 14206 (Mar. 30, 2009)
[6] 75 Fed. Reg. 25348 (May 7, 2010)
[7] 76 Fed. Reg. 74888 (Dec. 1, 2011)
[8] U.S. Energy Information Administration, “Annual Energy Outlook 2011,” pg. 27 (April 2011).
[9] 76 Fed. Reg. 74924 (Dec. 1, 2011)
[10]76 Fed. Reg. 74860 (Dec. 1, 2011)
[11] Hitting the Ethanol Blend Wall: Examining the Science on E15 Before the Committee on Science, Space, and Technology, 112th Cong., 1st Session (July 7, 2011) (question for the record by Rep. Chuck Fleischmann to EPA director Margo Oge).
[12] Environmental Protection Agency, Draft Regulatory Impact Analysis, pg. 8-1, (Nov. 2011)
[13] National Highway Transportation Safety Administration, Proposed Regulatory Impact Analysis, pg. 611, (Nov. 2011)
Support a Balanced Approach to Fuel Economy Standards
Issue
The Administration’s fuel economy regime is 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) have proposed new fuel economy rules three years early without direct authorization from Congress. The cumulative burden of all the Administration’s fuel economy rules will cost consumers about $3,000 per vehicle. The Austria-Carter amendment would ensure the impact of fuel economy rules on job loss, consumer choice, and increased vehicle costs are properly evaluated by returning the regulation of fuel economy for fiscal year 2013 back to one regulator (NHTSA) and one program (CAFE) as Congress intended.
Background
In 2007, Congress directed NHTSA alone to increase fuel economy by 40 percent under CAFE. However, under the guise of a “National Program,” in 2009 the Administration added two new regulators, EPA and CARB, to also regulate fuel economy. Currently three regulators write three different fuel economy rules pursuant to three different laws. In 2010, the Administration set a 35.5 mpg standard by MY 2016.
EPA and California regulators are again attempting to bypass Congress and have proposed a 54.5 mpg fuel economy standard for MY 2017-25 vehicles. If adopted this summer, by 2025, the Administration’s fuel economy rules will result in the average price of a vehicle rising by about $3,000.
Key Points
- Unless NHTSA is the sole fuel economy regulator, increased costs will hurt consumers, depress new car sales, and risk jobs. The Administration did not include an impact on jobs or auto sales in their proposed rule. NADA estimates that 6.8 million people will no longer qualify for a loan and thus will be regulated out of the new car market.
- 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 stops more duplicative fuel economy rules. NHTSA can continue to write fuel economy rules, but EPA cannot continue to waste millions on redundant fuel economy rules.
Study: Proposed Fuel Economy Rules Cut 7 Million Car Buyers Out of New-Vehicle Market
NADA: New-vehicle dealers support fuel economy increases if affordable for consumers
WASHINGTON (April 12, 2012) – The National Automobile Dealers Association (NADA) released a study indicating that higher vehicle prices resulting from proposed fuel economy rules will cut millions of potential new-car buyers out of the market in 2025. “To work, fuel economy improvements must be affordable,” said Don Chalmers, president of Don Chalmers Ford in Rio Rancho, N.M., at a press briefing. “While you can mandate what automakers must build, you can’t dictate what customers will buy, nor can you dictate if a bank will make a loan.”
“If my customers can’t buy what I’ve got to sell, there are no savings at the gas pump and there is no environmental benefit,” added Chalmers, chairman of NADA’s Government Affairs Committee. “If car and truck buyers do not purchase these new products, we all lose.”
The proposed rules, combined with the Administration’s previous fuel economy mandates, will raise the average price of passenger cars and light trucks for the 2025 model year by nearly $3,000, according to estimates by the Environmental Protection Agency and National Highway Traffic Safety Administration. (Read the study)
(Read more)
NADA/ATD Study: EPA Underestimated Emissions Control Costs for Model Year 2004-2010 Heavy-Duty Trucks
WASHINGTON (March 8, 2012) – NADA and the American Truck Dealers (ATD) released a new report that calls into question the Environmental Protection Agency’s (EPA) cost analysis of emissions control requirements for model year (MY) 2004-2010 commercial trucks. The mandates resulted in substantially higher prices for commercial vehicles, depressed sales and delayed the environmental benefits that the EPA originally sought. (Read the study)
(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)
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State and Local Jurisdictions Seeking to Double-Regulate Fuel Economy
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"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).