US fleet won't hit 54.4mpg by 2025, regulators walk back fuel economy requirements

US fleet won't hit 54.4mpg by 2025, regulators walk back fuel economy requirements

Cheaper gas forces regulators to reconsider fuel economy targets.

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Washington, D.C. – Regulators are backing away from the 54.5mpg fuel economy requirements for 2025, saying U.S. buyers are opting for too many trucks and sport utility vehicles for that target to work. The target now appears to be somewhere between 50mpg and 52.6mpg

In a draft of the mandated Technical Assessment Report (TAR) of automaker progress toward the 2025 fuel economy mandates, regulators say the initial assumption that two-thirds of vehicles sold by that year would be cars and only one-third would be trucks or SUVs was faulty.

When automakers and regulators hashed out fuel economy increases in 2008 and 2009, cars were popular as gasoline prices had surpassed $4 per gallon in 2008. In recent years, however, low fuel prices have led to a resurgence in the popularity of bigger vehicles. In 2015, about 52% of vehicles were cars, and 48% were light trucks.

In the TAR, regulators say if gas prices remain where they are now, the 52/48 car/truck mix will likely remain, putting the 2025 standard at 50.8mpg, about 6.7% lower than the 54.5mpg standard. If gas prices fall further, that standard could drop to 50mpg.

On the other side of the equation, the new high-cost model that regulators are using is significantly lower than the one used to set the 54.5mpg target. In the TAR, regulators say the new assumption is that if prices spike, the car/truck mix could go up to 62/38, leading to a target of 52.6mpg, 3.5% lower than the 54.5mpg target.

The TAR does note that automakers have done a great job of offering fuel-saving technologies such as smaller, turbocharged engines. In addition, the costs of those technologies was significantly lower than earlier studies had assumed they would be.

The report released Monday is a draft of the final document. Interest groups will have time to comment on the draft and ask for changes. The U.S. Environmental Protection Agency will then set a final rule, stating the new fuel economy targets, early next year. The outcome of the presidential election will likely influence the outcome of that final rule.

Once the rule gets released, there will be more rounds of comments, and the final version of the rule should be approved by April, 2018.

Source: U.S. EPA