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

Detroit Pistons to Move to Downtown in 2017, will Generate Additional $596.2M in Economic Impact

Agreements under which the Pistons will move to downtown Detroit and begin playing next season at the new Little Caesars Arena in The District Detroit, a $1.2 billion sports and entertainment development, have been announced today.

Ford, UAW-Ford Invest $6M in Motown Museum Expansion

In what will distinguish the company and the union as the lead donor for the project, Ford Motor Co. and UAW-Ford have announced plans to make a $6 million investment in the Detroit-based Motown Museum’s $50 million expansion.

Ford to Launch Fully Autonomous Vehicle for Ride Sharing in 2021

Dearborn-based Ford Motor Co. has announced its intent to have a high-volume, fully autonomous SAE level 4-capable vehicle in commercial operation in 2021 in a ride-hailing or ride-sharing service.

Ford to Auction Aviation-inspired Mustang

Dearborn-based Ford Motor Co. has unveiled a new aviation-inspired Mustang, which will be auctioned off to benefit the Wisconsin-based Experimental Aircraft Association’s youth education programs.

Fontinalis Partners Closes on $100M Mobility Fund

Fontinalis Partners, a Detroit-based venture capital firm, has closed on its second fund, Fontinalis Capital Partners II L.P., for $100 million. The new fund will invest in companies working on next-generation mobility technologies.
Edit ModuleShow Tags

Most Popular

  1. 2016 Top Restaurants in Metro Detroit for Business
  2. New Cocktail Bar Bad Luck Opens Thursday in Detroit’s Capitol Park
    The Detroit Optimist Society, the restaurant group that includes Wright & Co., Sugar House,...
  3. Ben’s Soft Pretzels Franchise Expands in Metro Detroit With 15 New Locations
    Ben’s Soft Pretzels, an Indiana-based soft pretzel bakery franchise, has announced plans to...
  4. Report: 1,600 Multifamily Units to be Delivered in Detroit Next Year
    More than 540 multifamily units have been built this year in Detroit, and more than 1,600 units...
  5. Henry Ford Health System Appoints New President and CEO of Health Alliance Plan
    Henry Ford System Appoints Terri Kline as its President And CEO Of Health Alliance Plan
  6. Pure Detroit to Open New Shop in Detroit’s Midtown District
    Pure Detroit, an independent city retailer, this month is opening a new location in Detroit’s...