In 2025, 13 years from now, the average new vehicle sold in the U.S. is slated to achieve a government-certified 54.5 miles per gallon. To motorists paying just shy of $4 per gallon in 2012, that sounds almost too good to be true. There must be a catch.
Several catches, actually, not counting the contentious politics of fuel economy, always a threat to derail long-term regulatory efforts. A Mitt Romney spokeswoman branded the 2025 standards, which the Obama administration negotiated with automakers, as “extreme” impositions that “limit choice for American families.” So it’s possible that the new standards won’t live to see 2013 out.
The key reality-check item, however, is that for better or worse the 54.5 mpg figure isn’t what it’s cracked up to be, for reasons outlined below. A more accurate way to understand what will happen, under final Corporate Average Fuel Economy standards announced by the Obama administration last week, is that the “combined” (urban and highway) mileage figure on new vehicles’ window stickers will reflect an average of roughly 36 mpg.
In recent years, window-sticker mileage estimates have moved more in line with real-life driving. So 36 mpg still represents a big jump, when the comparable figure today is in the mid-20s.
If the new standards are achieved, the resulting fuel savings will benefit family budgets, provided that savings at the pump exceed the cost of buying more fuel-efficient vehicles – and the best guess is that they will. Also, the nation gains a measure of energy independence, and the new vehicles emit less carbon dioxide.
Yes, it would be simpler and more straightforward simply to raise the federal fuel tax. Doing so would encourage more efficient vehicles without setting any particular standard. Higher fuel taxes would also discourage unnecessary driving and boost highway funds. But in a no-new-taxes nation, a considerably higher gas tax has been a non-starter.
So since 1975 the federal government has set what’s known as the Corporate Average Fuel Economy figure, a sales-weighted standard that manufacturers must meet or pay penalties. Unfortunately, CAFE figures are calculated in a way divorced from real-world conditions – and thus CAFE mileage ratings are unrealistically high – but they’re accepted as a standard for calculating fleet averages.
To complicate matters further, manufacturers will get credits for 2025 for such seemingly extraneous things as better vehicle air conditioning systems. So the sky-high 54.5 mpg figure that made headlines last week is basically an accounting artifact. We’re not going there. Still, mileage will improve.
Actually, it already has. In the past couple of years, using techniques ranging from electric-motor assists to small turbocharged engines to multi-speed (seven or eight!) automatic transmissions, automakers have made notable gains without sacrificing much of anything. Several mid-sized sedans now boast highway mileage ratings in the mid-30s or higher. What’s not to like?
And, despite the Romney camp’s complaint about restricted choices, the light-truck segment, SUVs and pickups, is likely to motor on right past 2025. The new standards accommodate larger vehicles’ “footprints” and don’t require them to achieve hyper-mileage. That’s a big reason truck-loving automakers signed on to the deal.
President Obama, firing back at Romney, joked that the GOP candidate must want to go back to the days of steam cars. That’s an exaggeration, but it’s no disparagement of the Stanley Steamers and Whites of yesteryear to realize that auto technology has indeed moved on. In opposing these new standards, Republicans, otherwise so industrially dynamic, risk seeming to be stuck in the mud.
