With 60 MPG, U.S. Automakers and Workers Can Lead World in Vehicle Manufacturing

During his most recent weekly address, President Obama stated that the U.S. can “out-innovate and out-compete” the rest of the world by investing in and adopting clean energy. The President can realize this vision and grow good jobs in the U.S. automotive industry by setting standards that reach 60 miles per gallon (mpg) by 2025. Around the world, nations concerned about oil dependence and carbon pollution are ramping up efforts to make cars and trucks more efficient. If our standards fall behind, so will our technology leadership.

We already know high and volatile gas prices can affect the domestic car business. When prices spiked in 2008, car buyers shunned large, gas-guzzling SUVs that were the foundation of the Detroit 3’s profits. Buyers instead flocked to foreign models, like fuel-efficient cars and crossovers, built to go further on a gallon of gasoline. It’s not surprising that foreign automakers had a stable of vehicles to meet consumer needs. For years, companies based outside the U.S. have been building vehicles that meet more stringent efficiency and pollution standards.

The graph below, produced by the International Council on Clean Transportation, demonstrates that the U.S. has been a laggard on standards. Asian and European car makers have consistently been subject to stronger requirements at home and have been first movers in efficient technologies such as hybrids and advanced diesels.

The U.S. is making some progress but it could be short-lived. Between now and 2016, the first phase of the National Program for clean cars requires vehicles sold in the U.S. to reach 34 mpg. The Obama Administration, working with the State of California, is now considering a second phase of the program out to 2025 with annual improvements ranging from 3% to 6%.

According to analysis by the U.S. Department of Transportation, Environmental Protection Agency and California Air Resources Board, a weak 3% trajectory can be achieved primarily through modest improvements to conventional vehicles. Hybrid-electric vehicles would not need to expand from the current 3% of annual sales.

Only the 6% scenario, reaching about 60 mpg in 2025, will keep the U.S. on-pace with proposed efficiency increases in the EU and China. And there are at least two reasons why this is important for U.S. competitiveness in the global car market.

First, a weak U.S. requirement can be a barrier to the export of U.S.-made vehicles to other regions. That’s a big missed opportunity. Both the EU and China have higher annual sales than the U.S. and China’s market will grow steadily as its economy continues to rapidly expand. These foreign markets, however, demand more efficient vehicles than those currently required in the U.S. market. Strong U.S. standards can spur U.S. production of efficient technologies to sell abroad.

Second, only a strong standard like 60 mpg will catalyze growth in the nascent U.S. plug-in electric vehicle industry. The timing couldn’t be more important. The Chinese, in particular, are charging forward to win the global race in plug-in vehicles. Under their New Energy Vehicle Development Plan, the Chinese government is investing $15 billion in its auto industry with a focus on electric vehicles. China plans to put 500,000 plug-in electric vehicles on its roads by 2015, and while this is half the current U.S. target of a 1 million vehicles by 2015, the Chinese also have a goal of 5 million vehicles by 2020.

A 6% per year, 60 mpg standard is critical to the U.S. auto industry competiveness since it is the only level that creates the regulatory certainty necessary to ensure that the U.S. auto industry maintains and grows its plug-in electric vehicle investments.

A 60-miles-per-gallon standard is the clear choice for keeping the U.S. globally competitive in clean energy. It’s the clear choice for U.S. jobs. (It’s also the clear choice for dealing with high gas prices and our oil dependence.) The Obama Administration should seize the opportunity to out-compete the rest of the world by setting clean car standards that reach 60 miles per gallon by 2025.

Luke Tonachel is a vehicle analyst at Natural Resources Defense Council. As an engineering officer on a Navy cruiser, he got hands-on experience with large propulsion plants and energy systems. After the navy, he joined a software company for a while but grew restless for a focus on environmental stewardship, returning to school to study environmental policy-making. Since joining NRDC in 2004, Luke has focused on the environmental impacts of mobility, working on ways to promote cleaner and more efficient car and truck technologies.

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  • steveshopa

    I have invented a way to make small cars safer in collisions.
    It can help reach 60 mpg.


  • Anonymous

    eu and japan have higher fuel efficiency standards than north america. eu and japan also have cars that have high mpg. coincidence? i think not.

    look at korean standards… this trend holds true.

  • Capt. Concernicus

    The U.S. has always lagged in fuel efficiency of its vehicles. Ford is the only one of the B3 that is taking fuel efficiency seriously. GM only has mild hybrids and we all know how those worked out before. Chrysler…well they decided to that sticking a more powerful Hemi in their vehicles was the way to go.

    This is why I bought a 2nd gen Toyota Prius. Currently I’m averaging 49.5 mpg. Slowly but surely working my way up to 50 mpg.

  • vokun1

    The article says that higher fuel efficiency requirements will lead to technological innovation. I doubt it. Europe has had much higher fuel efficiency standards (as shown in the graph in this article), and high gasoline taxes, for many years. As a result, Europe has smaller cars, more efficient diesel engines (100-year old ICE technology), and Europeans drive much less than Americans. These are all good things, but Europeans do not lead in new technologies, such as hybrids or plugins.

    In addition to setting standards, the government should fund innovative, revolutionary technologies directly.

  • Anonymous

    @vok: European automakers focus on diesel tech that spurn direct injection tech (in gas engine) and turbo charger, both of which I view as evidences of tech innovations as a result of higher fuel efficiency requirement. Oh, they also populate start-stop tech.

  • ramon leigh

    The only thing US auo workers lead the world in is the size of their salary and ability to extort same from American auto buyers. Obama is a stooge fo the UAW – he is the one who forced GM to accept the $140K per year average worker salaries when they were bankrupt!!! The UAW gave Obama tens of millions in cash before the last election. They own old Barrack. Efficiency in the future depends lock stock and barrel on battery technology.
    Gas powered cars are dead and gone, just as soon as
    good batteries appear, and DBM-Energy seems to have
    succeeded. All of this nonsense from Obama is nothing but PR and the words of a congenital liar and the dumbest man in any room. And the ugliest as well.

  • Shines

    Ah Ramon… such fine communication skills you have. Obama is nothing but PR and you are ? not President…
    DBM-Energy may have succeeded IF the battery can be mass produced relatively cheaply and IF its reliability and durability can be proven and IF an auto manufacturer can produce a car that uses them for for less than $30K…
    You may be right if all these things happen.
    In the mean time, the next time you post – check in the mirror before you call someone ugly…

  • James Davis

    ‘ramon leigh’; Bush didn’t change his name to Obama did he? It sounds like you are describing Bush to the ‘T’. You did forget to mention that Bush would eliminate all funding for clean energy and the electric car and direct it to nuclear melt downs like the GOP did after the Carter administration.

    Ford already has the 2nd gen electric battery and working on the 3rd gen. Telsa’s claims that their battery can get up to 350 miles and over 100 miles for their family car. Secretary Chu said that by 2014 or 16, electric cars will put fossil fuel cars to shame and we will be off foreign fuel because domestic fuel can carry our old clinkers until they rot down to the ground.

  • James Davis

    Canada is already installing supercharge stations along all their highways…getting ready when GM and Nissan starts supplying them with electric vehicles by the end of this year. It would be nice if America would start doing what Canada is now doing.

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  • Anonymous

    Ford is already making a diesel car with 60+ mpg and it’s not available in the USA..? Explain that Obama.. You suck Americans dry just as every other pres. did.. Shut done illegal federal reserve will be a great place to start with this country.

  • Anonymous

    Why not sell more diesel powered cars in the USA, seems a lot of them are getting 60+ gal. now; but suppressed to other markets.

  • tapra1

    After the navy, he joined a software company for a while but grew restless for a focus on environmental stewardship, returning to school to study environmental policy-making. Since joining NRDC in 2004.Tech Expo