What lower gas-mileage standards would mean
Car prices might fall but consumers will pay more at pump
The stage is set for a possible rollback in fuel economy standards as President Trump ordered his administration to review stiffer requirements implemented by former president Barack Obama.
Here’s a look at the implications of lower gas-mileage requirements, known as corporate average fuel economy (CAFE): THE ENVIRONMENT Lower fuel economy translates into higher carbon emissions. That contributes to climate change, which scientists blame for rising sea levels, extreme weather, harsher agricultural conditions, biodiversity loss and health concerns. Obama cited some of those as one of the key reasons why higher standards are necessary.
Higher gas mileage means lower petroleum consumption. To be sure, there is ample evidence people drive more when gas is less expensive. Miles driven in the U.S. increased for a sixth consecutive year in 2016, topping 3.2 trillion, according to the Federal Highway Administration. In 2016, the average price of gasoline declined for a fourth consecutive year to $2.13 per gallon nationwide, GasBuddy says.
But the Union of Concerned Scientists, which advocates for policies to combat climate change, estimated the U.S. would save 3 million barrels of oil per day by 2030 if current fuel-economy standards remained in place. VEHICLE DESIGN Vehicles are getting bigger, in part because more drivers are embracing crossovers, sport-utility vehicles and pickup trucks. Expect this trend to continue.
Technological improvements have also made these vehicles more fuel-efficient, narrowing the gap with cars and removing the incentive for choosing a smaller vehicle to save on gas.
One key question is whether automakers will still pursue vehicles such as hybrids and electric cars if standards are rolled back. If sales remain sluggish, they may fade from view. But that’s not inevitable. One factor to keep in mind is the impact of foreign markets on U.S. products. No one expects foreign markets to lessen fuel economy standards — and since vehicles often are designed for global distribution, it’s unlikely automakers will abandon alternative powertrain vehicles for the U.S. market.
Plus, there’s a competitive factor. Automakers don’t want to be caught empty-handed if consumers eventually demand electric cars and hydrogen vehicles.
“Our industry is committed to producing even safer and more energy-efficient vehicles in the future, and that’s what this process is all about,” said Mitch Bain- wol, CEO of the Auto Alliance, which lobbies on behalf of automakers and supports Trump’s review of CAFE standards. VEHICLE PRICES Industry experts generally agree average vehicle prices will increase if current standards remain in place through 2025. That’s because higher CAFE standards will require automakers to adopt technologies that are more expensive for car buyers, such as electric vehicles that are still expensive for the average shopper.
David Cole, chairman emeritus of the Center for Automotive Research, said automakers have exhausted most of the cost-effective ways to improve fuel economy, including weight reduction, tire improvements and aerodynamic design. “The economics are a big deal, and this is what really concerns the industry,” Cole said. “You add too much to the cost of a vehicle, they’re hard to sell.” FUEL COSTS It’s indisputable higher fuel economy requirements would save consumers money at the pump. The Consumers Union, the policy arm of Consumer Reports, said in a recent report the average buyer of a 2015 model-year vehicle spent $523 less on gas than for a 2005 vehicle. The question is whether those savings would offset potentially higher prices.
“Weakening the standard now would mean consumers would lose out on some of those savings,” Consumers Union policy counsel Shannon Baker-Branstetter said in a statement. “For middle-class families struggling to pay bills, raising costs at the pump is a bad deal.”