New Study on Fuel Economy and Safety Mandates



Published:

ANN ARBOR, June 14, 2011 – The Center for Automotive Research has released its latest study focused on the impact of anticipated fuel economy and safety mandates on the U.S. automotive market and industry in 2025.

The report, “The U.S. Automotive Market and Industry in 2025”, asks the question “What will anticipated mandates for increasing vehicle fuel economy and improved safety do to the automotive industry in the United States?” The study relies on technology and market forecast data from the National Research Council and J.D. Power and Associates to project the technology segmentation necessary to achieve anticipated fuel economy mandates in 2025.

Increased fuel economy mandates based on reducing emissions ranging from 3 percent to 6 percent per year are under consideration by the government. The highest increase, 6 percent, will raise the Corporate Average Fuel Economy (CAFE) from 35.5 mpg in 2016 to 62 mpg in 2025. Costs for safety mandates are less certain, but are conservatively estimated to add an additional cost of $1,500 to a new automobile by 2025.

A few of the report’s conclusions are:

  • The average increase in vehicle cost necessary to achieve the higher CAFE mandates range from $3,700 to over $9,000.
  • The higher mandates will increase vehicle prices that exceed the savings in fuel costs (over five years), even if gasoline costs $6.00 per gallon (in 2009 prices) for most scenarios under consideration.
  • Consumers will shun these technology costs by holding onto their used vehicles longer, especially if fuel prices are low (e.g., $3.50 per gallon), resulting in lower sales and a loss of automotive employment. Over 260,000 jobs may be lost if the highest mandate is passed and fuel prices stay low at $3.50 (2009 prices).
  • The authors seek moderation in raising fuel economy mandates and recommend periodic review to assess the rate of technology development and cost reduction of advanced technologies leading up to 2025.

The full report is available at www.cargroup.org

Edit Module
Edit Module Edit Module
Edit ModuleShow Tags

Related Articles

Annual Detroit Zoo Fundraiser to Return in June with Penguin Theme

The Detroit Zoological Society’s annual Sunset at the Zoo fundraiser will return in June with a penguin theme to celebrate the Detroit Zoo’s new Polk Penguin Conservation Center.

Dearborn Sausage Co. Adds New Chicken Products

Dearborn Sausage Company has developed five new fully-cooked, low-calorie chicken sausages for grilling outside or preparing inside, or using in other recipes.

Tom Gores, Dan Gilbert Plan to Bring Major League Soccer to Detroit

Detroit Pistons owner Tom Gores and Cleveland Cavaliers owner Dan Gilbert announced today they are partnering to bring a Major League Soccer club to downtown Detroit.

Beaumont Pediatric Rehabilitation Center Opens in Macomb Township

Beaumont Children's, part of the Beaumont Health system, has opened a children’s rehabilitation service center in Macomb Township.

Detroit Zoo Plans Spring Pet Adoption Event in May

The Detroit Zoo and Michigan Humane Society, in collaboration with more than 40 local animal welfare organizations, will host the spring 2016 Meet Your Best Friend at the Zoo May 13-14.
Edit ModuleShow Tags

Most Popular

  1. Detroit-based Create-Your-Own Burger Restaurant Opens in Garden City
    Detroit-based Great Lakes Burger Bar, which offers create-your-own burgers with a variety of meat...
  2. Link Detroit Completes $21M Project Connecting Walking, Biking Paths
    The partners of Link Detroit have completed a collection of five projects connecting 20 miles of...
  3. Report: Transportation Jobs in High Demand in Michigan
    With nearly 565,000 workers in transportation-related occupations in Michigan, one-fifth are over...
  4. Birmingham Nears 100% Occupancy as More Retailers Plan Openings
    Downtown Birmingham — which boasts a 97 percent business occupancy rate — is preparing for...
  5. P3 Opens Autonomous, Connected Technologies Testing Center in Southfield
    The global consulting firm P3 today opened its mobility innovation center in Southfield dedicated...
  6. Long-Term Talent Supply May Threaten Demand for Most Jobs in Michigan
    Michigan’s top economic leaders today issued a series of findings that show the state is...