Obama Administration finalizes new fuel efficiency standards

Developed in cooperation with automakers, unions, consumer groups, environmental and energy experts and states, the new standards call for 54.5 mpg equivalent fuel efficiency for cars and light-duty trucks by 2025.

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The Obama Administration on Aug. 28 finalized standards that will increase fuel economy to the equivalent of 54.5 mpg for cars and light‐duty trucks by Model Year 2025. When combined with previous standards set by this Administration, this move will nearly double the fuel efficiency of those vehicles compared to new vehicles currently on American roads. In total, the administration’s national program to improve fuel economy and reduce greenhouse gas emissions reportedly will save consumers more than $1.7 trillion at the gas pump and reduce U.S. oil consumption by 12 billion barrels.

"These fuel standards represent the single most important step we’ve ever taken to reduce our dependence on foreign oil,” says President Obama. “This historic agreement builds on the progress we’ve already made to save families money at the pump and cut our oil consumption. By the middle of the next decade our cars will get nearly 55 miles per gallon, almost double what they get today. It’ll strengthen our nation's energy security, it's good for middle class families and it will help create an economy built to last."

The president says that achieving the new fuel efficiency standards will encourage innovation and investment in advanced technologies that increase economic competitiveness and support high‐quality domestic jobs in the auto industry. The final standards were developed by U.S. Department of Transportation's (DOT) National Highway Traffic Safety Administration (NHTSA) and the U.S. Environmental Protection Agency (EPA) following engagement with automakers, the United Auto Workers, consumer groups, environmental and energy experts, states and the public.

Last year, 13 major automakers, which together account for more than 90 percent of all vehicles sold in the United States, announced their support for the new standards. By aligning Federal and state requirements and providing manufacturers with long‐term regulatory certainty and compliance flexibility, the standards encourage investments in clean, innovative technologies that will benefit families, promote U.S. leadership in the automotive sector, and curb pollution.

"Simply put, this groundbreaking program will result in vehicles that use less gas, travel farther, and provide more efficiency for consumers than ever before—all while protecting the air we breathe and giving automakers the regulatory certainty to build the cars of the future here in America,” says Transportation Secretary Ray LaHood. “Today, automakers are seeing their more fuel‐efficient vehicles climb in sales, while families already saving money under the Administration’s first fuel economy efforts will save even more in the future, making this announcement a victory for everyone." 

The program also includes targeted incentives to encourage early adoption and introduction into the marketplace of advanced technologies to dramatically improve vehicle performance, including:

  • Incentives for electric vehicles, plug‐in hybrid electric vehicles, and fuel cells vehicles;
  • Incentives for hybrid technologies for large pickups and for other technologies that achieve high fuel economy levels on large pickups;
  • Incentives for natural gas vehicles;
  • Credits for technologies with potential to achieve real‐world greenhouse gas reductions and fuel economy improvements that are not captured by the standards test procedures.