Released August 04, 2023 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Cars and trucks would get more miles to the gallon, and American consumers would save on fuel costs, under a draft regulation to increase vehicle fuel-economy standards issued July 28 by the U.S. Department of Transportation (DOT) (Washington, D.C.).
One option floated by DOT's National Highway Traffic Safety Administration (NHTSA) would increase Corporate Average Fuel Economy (CAFE) standards 2% per year for passenger cars and 4% for light-duty trucks starting with model year 2027 vehicles. Those standards ramp up in the years after 2027 such that automakers would potentially achieve a fleet-wide average fuel economy of 58 miles per gallon (MPG) by 2032.
The draft rule also included a 10% improvement per year for commercial pickup trucks and work vans (with gross vehicle weight ratings of more than 8,500 pounds and less than 14,001 pounds) beginning in model year 2030 and ramping up through model year 2035.
The NHTSA will take public comment for 60 days after the proposed rule is published in the Federal Register. A posting is expected in the coming days.
Count David Pickering, Industrial Info Resources' vice president of research for the Industrial Manufacturing sector, as a skeptic. "The government is trying to force Americans to purchase EV's that they cannot afford to be used with a charging infrastructure that does not exist. The charging situation is so bad, that seven automakers formed a joint venture and allocated $1 billion to create 30,000 charging stations in the U.S. Essentially these automakers are having to do the job the federal government said it would do, but as yet has not."
The DOT's proposed new CAFE standards "are a continuation of the same government overreach the market has been seeing for 20 years: tighter emissions standards and no real solutions on the energy supply side. We were energy independent and could have controlled the energy side very easily, but we did not. Ford said it expects to lose $4.5 billion on EVs in 2023. So despite the advertising and the spin, the EV business is stuck in neutral, if not reverse."
NHTSA said it will engage with a broad set of stakeholders during this public-comment period, including consumers, unions, automakers, states, environmental groups and others. The proposal also would increase fuel efficiency performance for heavy-duty pickup trucks and work vans.
If finalized as proposed, NHTSA projected the updated standards would save Americans hundreds of dollars at the pump, all while making America more energy secure and less reliant on foreign oil. The agency estimated that the combined benefits of its proposal exceed costs by more than $18 billion.
"Better vehicle fuel efficiency means more money in Americans' pockets and stronger energy security for the entire nation," said U.S. Transportation Secretary Pete Buttigieg.
NHTSA said its proposed fuel-economy standards will complement and align with the recently proposed vehicle emission standards from the U.S. Environmental Protection Agency (EPA) (Washington, D.C.) for similar vehicle fleets. The two agencies pledged to coordinate efforts to optimize the effectiveness of its standards while minimizing compliance costs, consistent with applicable statutory factors.
The EPA draft rule on tailpipe emissions was released in April. For more on that draft rule, see Industrial Info's April 13, 2023, article - Biden EPA Seeks to Boost EV Sales by Tightening Vehicle Tailpipe Emission Standards. Industry groups representing energy, transportation and food blasted the EPA's proposed regulation. For more on that, see July 14, 2023, article - Oil, Transport and Food Groups Blast EPA Draft Rule on Vehicle Tailpipe Emissions.
CAFE standards were 18 miles per gallon when they were first introduced in model year 1978 vehicles. For 2013 model year vehicles, the average rose to 31.4 MPG. Currently, for model year 2023 vehicles, the corporate average fuel economy is 41.1 MPG, according to the DOT.
The highway safety agency said increasing CAFE standards by 2%-4% annually beginning in model year 2027 is consistent with Congress' direction to conserve fuel and promote American energy independence and American auto manufacturing, while providing flexibility to industry on how to achieve those targets.
Although NHTSA does not take electric and other alternative fuels into account in setting the standards, manufacturers may use all available technologies--including advanced internal combustion engines, hybrid technologies and electric vehicles--to meet the new standards.
The Transportation Department estimated the new CAFE standards, if enacted as drafted, would cut U.S. gasoline consumption by 88 billion gallons through 2050 and avert the release of 900 million tons of carbon dioxide (CO2). That's the equivalent of taking more than 233 million vehicles off the road between 2022 through 2050.
Analysts have projected that meeting these new standards would effectively require two-thirds of automakers' fleets to be all-electric by 2032.
The Transportation Department said the new CAFE standards also would cut tailpipe emissions that sicken people living near highways. Since the lowest-income households spend nearly 20% of income on transportation fuels, which is three times the average U.S. household, the DOT said its proposal advanced the administration's commitment to advancing environmental justice.
"CAFE standards have driven the auto industry to innovate in improving fuel economy in ways that benefit our nation and all Americans," NHTSA Acting Administrator Ann Carlson said in a statement. "The new standards we're proposing today would advance our energy security, reduce harmful emissions, and save families and business owners money at the pump. That's good news for everyone."
The draft rule drew mixed reviews. A group representing major automakers noted the DOT proposal and the earlier EPA proposed regulation on vehicle tailpipe standards push electrified vehicles at the expense of other technologies.
The DOT proposal "doesn't knock our socks off," said Dan Becker, director of the Safe Climate Transport Campaign at the Center for Biological Diversity, but would serve as a backstop in the case that electric vehicles do not become more prevalent.
In an interview with CNN, Pete Huffman of the Natural Resources Defense Council called the proposal "a winner all around" for drivers and reducing the reliance on planet-warming fossil fuel.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
One option floated by DOT's National Highway Traffic Safety Administration (NHTSA) would increase Corporate Average Fuel Economy (CAFE) standards 2% per year for passenger cars and 4% for light-duty trucks starting with model year 2027 vehicles. Those standards ramp up in the years after 2027 such that automakers would potentially achieve a fleet-wide average fuel economy of 58 miles per gallon (MPG) by 2032.
The draft rule also included a 10% improvement per year for commercial pickup trucks and work vans (with gross vehicle weight ratings of more than 8,500 pounds and less than 14,001 pounds) beginning in model year 2030 and ramping up through model year 2035.
The NHTSA will take public comment for 60 days after the proposed rule is published in the Federal Register. A posting is expected in the coming days.
Count David Pickering, Industrial Info Resources' vice president of research for the Industrial Manufacturing sector, as a skeptic. "The government is trying to force Americans to purchase EV's that they cannot afford to be used with a charging infrastructure that does not exist. The charging situation is so bad, that seven automakers formed a joint venture and allocated $1 billion to create 30,000 charging stations in the U.S. Essentially these automakers are having to do the job the federal government said it would do, but as yet has not."
The DOT's proposed new CAFE standards "are a continuation of the same government overreach the market has been seeing for 20 years: tighter emissions standards and no real solutions on the energy supply side. We were energy independent and could have controlled the energy side very easily, but we did not. Ford said it expects to lose $4.5 billion on EVs in 2023. So despite the advertising and the spin, the EV business is stuck in neutral, if not reverse."
NHTSA said it will engage with a broad set of stakeholders during this public-comment period, including consumers, unions, automakers, states, environmental groups and others. The proposal also would increase fuel efficiency performance for heavy-duty pickup trucks and work vans.
If finalized as proposed, NHTSA projected the updated standards would save Americans hundreds of dollars at the pump, all while making America more energy secure and less reliant on foreign oil. The agency estimated that the combined benefits of its proposal exceed costs by more than $18 billion.
"Better vehicle fuel efficiency means more money in Americans' pockets and stronger energy security for the entire nation," said U.S. Transportation Secretary Pete Buttigieg.
NHTSA said its proposed fuel-economy standards will complement and align with the recently proposed vehicle emission standards from the U.S. Environmental Protection Agency (EPA) (Washington, D.C.) for similar vehicle fleets. The two agencies pledged to coordinate efforts to optimize the effectiveness of its standards while minimizing compliance costs, consistent with applicable statutory factors.
The EPA draft rule on tailpipe emissions was released in April. For more on that draft rule, see Industrial Info's April 13, 2023, article - Biden EPA Seeks to Boost EV Sales by Tightening Vehicle Tailpipe Emission Standards. Industry groups representing energy, transportation and food blasted the EPA's proposed regulation. For more on that, see July 14, 2023, article - Oil, Transport and Food Groups Blast EPA Draft Rule on Vehicle Tailpipe Emissions.
CAFE standards were 18 miles per gallon when they were first introduced in model year 1978 vehicles. For 2013 model year vehicles, the average rose to 31.4 MPG. Currently, for model year 2023 vehicles, the corporate average fuel economy is 41.1 MPG, according to the DOT.
The highway safety agency said increasing CAFE standards by 2%-4% annually beginning in model year 2027 is consistent with Congress' direction to conserve fuel and promote American energy independence and American auto manufacturing, while providing flexibility to industry on how to achieve those targets.
Although NHTSA does not take electric and other alternative fuels into account in setting the standards, manufacturers may use all available technologies--including advanced internal combustion engines, hybrid technologies and electric vehicles--to meet the new standards.
The Transportation Department estimated the new CAFE standards, if enacted as drafted, would cut U.S. gasoline consumption by 88 billion gallons through 2050 and avert the release of 900 million tons of carbon dioxide (CO2). That's the equivalent of taking more than 233 million vehicles off the road between 2022 through 2050.
Analysts have projected that meeting these new standards would effectively require two-thirds of automakers' fleets to be all-electric by 2032.
The Transportation Department said the new CAFE standards also would cut tailpipe emissions that sicken people living near highways. Since the lowest-income households spend nearly 20% of income on transportation fuels, which is three times the average U.S. household, the DOT said its proposal advanced the administration's commitment to advancing environmental justice.
"CAFE standards have driven the auto industry to innovate in improving fuel economy in ways that benefit our nation and all Americans," NHTSA Acting Administrator Ann Carlson said in a statement. "The new standards we're proposing today would advance our energy security, reduce harmful emissions, and save families and business owners money at the pump. That's good news for everyone."
The draft rule drew mixed reviews. A group representing major automakers noted the DOT proposal and the earlier EPA proposed regulation on vehicle tailpipe standards push electrified vehicles at the expense of other technologies.
The DOT proposal "doesn't knock our socks off," said Dan Becker, director of the Safe Climate Transport Campaign at the Center for Biological Diversity, but would serve as a backstop in the case that electric vehicles do not become more prevalent.
In an interview with CNN, Pete Huffman of the Natural Resources Defense Council called the proposal "a winner all around" for drivers and reducing the reliance on planet-warming fossil fuel.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
