September 21, 2016 / 11:41 PM / 4 years ago

Automakers raise concerns over Obama administration fuel rules

WASHINGTON (Reuters) - Major automakers escalated a fight to delay or revise the Obama administration’s ambitious targets for cutting vehicle greenhouse gas emissions through 2025, saying in prepared testimony made public on Wednesday that low gas prices and weak demand for electric vehicles may require significant revisions to the rules.

The issue is not whether vehicle fuel economy will improve, Mitch Bainwol, head of the industry trade group Alliance of Automobile Manufacturers, said in testimony to be delivered on Thursday to a U.S. House Energy and Commerce Committee hearing, “but rather how will automakers meet the aggressive standards currently in place, by when and at what cost to consumers, industry and the economy as a whole?”

The trade group represents General Motors Co, Toyota Motor Corp, Volkswagen AG, Fiat Chrysler Automobiles NV and other major automakers.

Bainwol cited administration figures that reaching the goal of roughly doubling average vehicle fuel economy by 2025 will cost the industry $200 billion over 13 years.

Automakers have sold 448,837 plug-in hybrid and electric vehicles since 2011, less than half of President Barack Obama’s goal of putting one million such vehicles on the road by 2015, according to the testimony.

Obama administration officials countered in their written testimony made public Wednesday that the policy is working. National Highway Traffic Safety Administration general counsel Paul Hemmersbaugh and Environmental Protection Agency official Janet McCabe both said that fuel saving technologies are entering the market faster than expected.

U.S. regulators must decide by April 2018 whether the 2022 through 2025 model year requirements are feasible or should be changed. Automakers in 2011 backed the aggressive fuel rules, but only if the policy included a “mid-term review.”

Bainwol and John Bozzella, president and CEO of the Association of Global Automakers, also took aim at California’s electric vehicle sales mandates, saying the state’s program is costly and undermines the U.S. administration’s goal of giving the industry one national greenhouse gas emissions standard.

The association is a trade group that represents Honda Motor Co, Nissan Motor Co, Hyundai Motor Co , and others.

The EPA and NHTSA have estimated fuel economy compliance will boost the cost to automakers of a new vehicle by between $894 and $1,017 by 2025 compared with 2021 vehicles. Bozzella and Bainwol said California’s zero emission vehicle mandate could add another 35 percent to 40 percent to average vehicle costs.

Regulators say consumers will save significantly more in fuel over the life of a vehicle compared to the added upfront cost. Consumer advocacy group Consumers Union on Wednesday said the 2025 fuel rules should remain in place to “ensure that consumers can keep transportation costs down.”

When the Obama administration first outlined in 2011 its goal of boosting average fleet fuel economy to 54.5 miles per gallon, regulators forecast that 67 percent of vehicles sold in 2025 would be cars. Since then, gasoline prices have plummeted and truck and SUV sales have surged. Regulators now estimate the fleet will average 50 mpg to 52.6 mpg in 2025.

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