Auto Suppliers Optimistic About US Hitting 2025 MPG Goals

An Eaton executive thinks the auto industry is on track to meet federal mpg mandates, as do other auto suppliers recently surveyed.

In an interview with Bloomberg, Mihai Dorobantu, director of technology planning and government affairs for Eaton’s Vehicle Group, said hitting the mileage target spurs innovation and job growth. For that reason, Dorobantu said the U.S. government should maintain the Obama administration’s goal of rising rom 35.5 miles per gallon this year to a projected 50.8 mpg in 2025.

The U.S. rules are close enough to those set by the European Union, Japan, and China, that the industry is seeing a stable global market large enough to support investments in the innovation, Dorobantu said. Eaton supplies global automakers with engine control systems and air conditioners.

“Suppliers are quite optimistic they can help the automakers achieve these targets,” Dorobantu said.

Eaton’s perspective on these issues is similar to opinions expressed in a recent survey by executives from other major auto suppliers. Calstart, an organization supporting cleaner, more efficient transportation systems, conducted the survey of 23 suppliers selling parts directly to automakers.

Seventy percent of the companies surveyed, including Eaton, think that the U.S. shouldn’t back away from its 2025 goal, according to John Boesel, president of Pasadena, Calif.-based Calstart. Fifty-nine percent said the target is creating job growth, according to the study.

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The Alliance of Automobile Manufacturers, a Washington-Based trade group representing major automakers, has taken a different stance. Mitch Bainwol, president of the alliance, said at an August industry conference that the 2025 regulations could make new cars too expensive to keep sales strong.

Auto suppliers are in a different situation, according to Boesel. Suppliers are more open to risky investments because it could be their only way to survive, he said.

The next U.S. president will make a preliminary decision next year on whether the mpg target will be supported by the new administration. A recent technical assessment released by the U.S. Environmental Protection Agency and other federal departments said that automakers are on track to meet the mandate primarily with new fuel efficient technologies such as turbochargers.

Bloomberg