White House Proposes Slowing Fuel Efficiency Hikes for Large Pickups, SUVs

In a move designed to win automaker support for a new round Corporate Average Fuel Economy increases that would see the minimum combined fleet average jump to 56.2 mpg by 2025, The Wall Street Journal reports the Obama administration has offered to create a reduced standard for larger light trucks and SUVs. Under the plan, vehicles like the Ford F-Series and Chevy Tahoe would be subject to a 3.5 percent per year hike—30 percent lower than the rate of increase for cars and smaller light-duty trucks.

The proposal comes in the midst of an Alliance of Automobile Manufacturers campaign to pressure lawmakers to oppose the new standard on the grounds that consumers will refuse to buy more efficient cars and trucks. The AAM has pounded the new proposed mandates in radio ads, editorials, news reports, and even on the Facebook page of an apparent astroturf group calling itself Americans for Vehicle Choice. Carmakers say they can meet 56 mpg, but that vehicle costs will rise, sales will fall, and jobs will be lost. (Though the Natural Resources Defense Council and others who have studied data on the issue disagree.)

Particularly important to automakers are sales of light duty trucks, which have remained strong in the face of high fuel prices in large part because of demand from private businesses. Allowing a partial exemption on heavier models of those trucks would allow the industry a little more leeway in adding fuel saving technologies and keep cost increases for those vehicles lower.

But is that really what consumers want—be they fleets, independent contractors or plain old truck enthusiasts? Judging by sales of the Ford F-150 EcoBoost model, it isn’t. Early sales of the truck have stunned even Ford executives, who reported that EcoBoost-equipped F-150s made up 40 percent of all sales of the model, despite an added cost of between $750 per vehicle. The truck sports a twin-turbocharged V6 engine providing 365-horsepower (that’s 63-hp more than the entry level V6 model, with no diminished towing capacity,) and fuel savings of nearly 25 percent.

There’s no word yet as to whether the proposed exemption has the administration and carmakers any closer to a deal, but with or without industry consent, the White House is scheduled to release its final fuel economy proposal in September.

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  • James Davis

    It sounds like the American automakers will be filing for bankruptcy again, or standing with their hands out for another welfare cheque, and they have no idea that the American people is screaming to get away from fossil fuel and to a clean energy economy with electric cars. …When will they ever learn???

  • Charles

    The American automakers have a very good idea of what Americans are buying. The Ford F series trucks out sold all hybrids, diesels and EVs combined by a factor of 2 last month. Also for the month of June, GM, Ford and even Chrysler outsold Toyota and Honda.

    The automakers invest in what sells. That was a mistake when fuel prices spiked. Ford and to some extent GM are trying to fix the all eggs in one basket problem. Both are doing so by making more “world” cars. This is what other automobile manufactures have done forever. The results are beginning to show. It can be argued that Ford has the best midsize hybrid (Fusion), the best ICE compact car (Focus) and second best ICE small car (Fiesta).

    I want more small hybrids, plug in hybrids and pure EVs, but I am not most Americans. I think other Americans should think like me, but understand that most Americans want the big gas hogs. I do not understand this, but I also do not understand how my girlfriend likes olives.

  • Duude

    The reason why jobs will be lost is because consumers are resistant to shoe-horning a family of 4-6 into a econo box, and the much higher prices of future electric and hybrid vehicles capable of 56 miles to the gallon will lack value in the eyes of the same consumers. instead, they’ll buy older used vehicles that offer more value. New car sales will drop and manufacturing jobs will disappear forever in the US. I expect more reliable vehicles that don’t meet the higher mpg standards of latter years will become the best value at used car lots.

  • Charles

    A suggestion, whenever the CAFE MPGs are listed in an article, please put the approximate EPA sticker MPGs with them.

    Something like this:
    The US has proposed a new 56.2 MPG (approx. EPA 40 MPG) CAFE standard.

    So many people are confused by the two very different standards. I see people posting about how it is almost impossible to got to 56.2 MPG, but those same people would have little trouble with a 40 MPG standard.


  • ACAGal

    Despite living in CA, with the toughest rules my next door neighbor is killing himself and me.
    6 vehicles, 3 drivers. Most are diesel SUVs or trucks. The guy has had heart surgery, but he doesn’t understand how his choices in vehicles are harming his heart…….and my lungs.

    Now It sounds like the White House has stupid folks living there too!

  • Charles

    One last little rant about EPA vs CAFE MPG values. I believe the current CAFE standard is 30.2 MPG. Here are a few cars that get at least 30.2 CAFE combined MPG and their EPA sticker MPG values:

    2012 Mustang (305 HP V6 with automatic transmission) 30.28/23 MPG
    2012 S60 (2.5 L, automatic) 30.44/23 MPG
    2011 Venza (AWD, 2.7 L automatic) 30.20/22 MPG
    2011 Ranger pickup (2.3 L, manual) 31.24/24 MPG
    2011 Buick Regal (2.0 L turbo, manual) 31.18/24 MPG
    2011 Escape (2.5 L, FWD, automatic) 30.54/23 MPG (the hybrid gets 44.14 CAFE MPG)
    2011 Mazda 6 (2.5 L, automatic) 32.81/25 MPG

    So you can see that today’s 30.2 CAFE MPG is only about 22-23 EPA sticker MPG.

    Here is a list of current gas powered cars that get close to or above the 56.2 CAFE MPG standard:

    2011 CR-Z 50.12 CAFE MPG
    2011 Sonata Hybrid 52.18 CAFE MPG
    2011 Fusion Hybrid 54.18 CAFE MPG
    2011 Insight 57.09 or 57.28 CAFE MPG
    2011 CT 200h 57.50 CAFE MPG
    2012 Civic Hybrid 63.07 CAFE MPG
    2011 Prius 70.78 CAFE MPG

  • Shines

    Charles I must agree with your first post. Except I don’t understand why my wife leaves her slippers in the middle of the bathroom floor…

  • John101

    What happens to electric fuel efficiency if Obama gets his ways of implementing Socialism via energy Tax hikes in the name of CAP & TRADE or CAP & TAX. Or if he can’t get CAP & TAX, he will just have EPA regulate without Congress.

    Quote Obama, “Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”

  • Samie

    While I agree with Charles about his assignment of the market and EPA ratings, I wonder if consumers truly have a diverse group of options when it comes to hybrids, diesels, and EVs. Most puzzling is the lack of options eg. hybrid Yaris (compact to subcompact hybrid), diesel F150 (small-block), hybrid minivan, more hybrid small SUV’s, or any real mass production of EVs in the next few years.

    I would remind everyone that the majority of consumers think in a very narrow short-term framework. Beyond common manufacturing problems, or lack of production vehicles, consumers generally will tend to buy more fuel efficient vehicles when fuel prices are high and less fuel efficient vehicles when gasoline goes back down and when fuel prices remain constant (mid-priced) over time we revert back to less fuel efficiency.

    John101 & Duude
    You need to think first about your arguments. Those hidden costs if forced in a more direct way onto the market, they will tend to cause short-term losses of profit eg. mandatory $750 EcoBoost would reduce overall profit margins and extra costs will be passed onto the consumer. Consumers may in turn buy another vehicle that has less of a profit margin than the truck because of the higher cost. Over time markets tend to find greater efficiencies and reduce costs for extra fuel saving technologies. However, trucks may be priced higher regardless of the time frame but this will make CAFE more realistic and make consumers think about their options eg. to go with a V6 or diesel engine instead of a V8 or if they truly need a truck.

    If ACAGal’s next door neighbor buys an excessive amount of gas hog vehicles he/she has every right as a consumer to do so. But what the argument is really about is if consumers should pay more in a direct way for their excess to reduce collective problems with petroleum or should we be passive for the sake of personal liberties and short-term profits and turn our heads away from the long-term implications.

    In general and broadly speaking this means we either try to collectively manage long-term problems or we wait till problems arise and then we deal with them when we only need to do so. I think its ok to have a manage now or wait and see attitude towards things just as long as we understand the implications of both points of view.

  • James Davis

    “John 101”, you have trouble with comprehension, don’t you. Obama never said anything like that. Here is a quote from you, tell me if you remember it: “I am stupid and can’t help it. I am a Republican.”

  • pickupdoctor

    Yes, there are limited options out there, until one manufacturer (Toyota I am looking at you) introduces a Hybrid Truck that can delivery great gas mileage as well as amazing towing, speed, acceleration etc. We will not see GM or FORD to invest significantly into their TRUCKS or even attempting to advance the EV technology or implementing it into their TRUCKS.

    Nothing is impossible, but it is all about finding right balance. I think government should push more on increasing MPGs for TRUCKS then regular cars.

    FORD sells more FORD F-150 trucks each month then any other passenger car.

    FORD F-150 sold 49,618 units in June of 2011

    Best selling passenger car in June of 2011 was Chevrolet Cruze sold only 24,xxx units.

  • Capt. Concernicus

    My favorite quote from the article.

    “The proposal comes in the midst of an Alliance of Automobile Manufacturers campaign to pressure lawmakers to oppose the new standard on the grounds that consumers will REFUSE to buy more efficient cars and trucks.”

    Yes, as a consumer I definitely OPPOSE buying more efficient vehicles. I want a car that fuel economy is 4/7 cty/hwy. That’s the kind of car I want because I love spending my hard earned money on fuel.

    —@ John101,

    Really? Am I supposed to believe Obama said that?

    —@ James Davis,

    I found your last post funny. Thx! Not saying if it’s true or not, but it made me smile.

    —@ Jakub Kudlacz,

    I agree with you. I want a vehicle that can do 0-60 in 2.7 seconds, tow at least 8,000lbs., get at least 50 mpg, fit 7 passengers comfortably and cost no more than $18,000.

    Anyway, oil dependence is a National Security issue and the government and the American people should act like it is and fully engage in ways that will get us away from our dependence on oil exporting countries that are neither politically stable or friendly to us and our gov’t.

    So let’s get beyond our petty bickering, blame game and finger pointing that has become our national past time and prioritize our needs as well as innovate our way into a better, less dependent future.

  • AP

    James Davis and Copernicus,

    You should both believe that Obama said that, because he did. I’ve seen it played about 20 times! You should look it up on youtube, unless you want to maintain plausible deniability.

  • Anonymous

    “The American automakers have a very good idea of what Americans are buying. The Ford F series trucks out sold all hybrids, diesels and EVs combined by a factor of 2 last month. […]

    The automakers invest in what sells.”

    Yeah. Isn’t that exactly the SAME excuse that Ford, GM and Chrysler kept investing in building truck-based gas guzzlers like Explorer (prev. generation), Trailblazer, Commander, etc. in the last decade, until the gas price sky rocketed and the Domestic three found their cupboard is bare and they essentially have no alternatives to offer to Americans?

    The result: two went for bankruptcies and had to be bailed out. The other one lost a total of JUST under 21 billion dollars in the past five years.

    Yeah, you read it right, despite bumper profits in the last couple of years, it still suffered a staggering amount of combined LOSSES (just under 21b) in the past five years. JOB WELL DONE!

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