Automakers Oppose 56-mpg Fuel Standard for 2025

Not too long ago, two of the three big American car manufacturers were begging the federal government to bail them out. Now they're buying ads and paying lobbyists to pressure the White House to exempt light trucks and SUVs from a proposed 56 miles-per-gallon fuel standard by 2025.

“This is the same shortsighted thinking that got the U.S. automakers in trouble in 2008 when gas prices caused them to be overloaded with gas guzzling SUV inventories that just wouldn’t sell,” said Jack Gillis of the Consumer Federation of America (CFA) and author of The Car Book.

CFA's research director, Mark Cooper, called the automakers' latest campaign “economic suicide” and warned that it's unlikely U.S. taxpayers will bail them out again.

“In making their case, the car companies have trotted out the old fear campaigns that they’ve historically used to resist fuel economy and safety improvements over the years, claiming that automobiles will be more expensive, smaller and less safe and that consumers won’t buy them,” said Gillis. “Their fear-filled predictions have been proven wrong, time and time again. “We heard that requiring airbags would add thousands to the cost of a car and consumers wouldn’t want them,” Gillis said. “We heard that publicizing crash test data was misleading, unfair and would not be understood by consumers. Well, today there is nary an ad that doesn’t tout the number of airbags or crash test performance.”

“As they were then, the car companies today are flat out wrong with their claims of high technology costs, tiny cars, and consumer rejection of fuel efficient vehicles,” said Cooper.

Consumer groups fight back

While Ford has convinced the automakers to launch a national ad campaign against setting higher fuel economy standards, CFA and Consumers Union, publisher of Consumer Reports, are fighting back with a campaign of their own.

“Consumer organizations are no match for the massive car company advertising budgets, but we think it is critical that the consumer voice be heard”, said Gillis. The two consumer organizations plan a campaign that will include radio, print and online social media.

10 reasons

As part of the campaign the consumer groups have come up with 10 reasons why President Obama should set the fuel economy standard to 56 mpg by 2025. They say the higher standard will:

1. Save consumers over $6,000 per vehicle in gasoline costs over the vehicle’s lifetime (compared to vehicles that meet the 2016 standard);

2. Double the fuel economy of new vehicles between 2008 and 2025;

3. Cut gasoline consumption by one-third;

4. Ensure U.S. car companies will be competitive in the U.S. and globally;

5. Substantially reduce our dependence on foreign oil;

6. Achieve widely accepted greenhouse gas reduction goals (40% by 2030);

7. Offset any increase in vehicle cost by immediate savings at the pump;

8. Stimulate competition, keep costs down and promote product diversity;

9. Ensure consumers will have vehicles they want (If they want SUVs they’ll have them, but much more fuel efficient versions); and,

10. Provide a long-term approach (14 years from now) which is both sensible, achievable, and allows for a gradual adjustment by automakers and consumers.

Otherwise ...

On the other hand, here’s what the consumer groups say will happen if the car companies convince the President to “back-off” reasonable 56 mpg by 2025 requirements:

• Consumers will lose up to $50 billion in gas savings;

• Gasoline consumption and oil imports will increase by hundreds of millions of barrels;

• Auto sector employment will lose 50,000 jobs; and,

• U.S. vehicles will be uncompetitive both here and in the global market.

“If the White House agrees to the various demands of the car companies, consumers will be paying literally billions of dollars more for gasoline than they should have to,” said Cooper.

“The tragic irony is that reducing fuel economy requirements will ensure that U.S. vehicles remain uncompetitive in the global market,” said Gillis. “The U.S. already has much lower fuel economy standards than the rest of the world.

Low standards for 2025 will not only mean that our vehicles will be unpopular in the global market, but here in the U.S., foreign competition will again kill the U.S. automakers,” said Gillis.