President Obama on Tuesday unveiled a plan to raise the national fuel economy standards to an average of 35.5 miles per gallon by 2016, four years sooner than a mandate from a 2007 energy bill.
The president announced the proposal at a time when carmakers are scrambling to roll out hybrid or all-electric cars to meet the public and lawmakers' demand for more fuel-efficient vehicles.
Daimler just announced this morning that it's taking a 10 percent stake in Tesla Motors after being impressed by how quickly the San Carlos, Calif.-based start was able to design and launch its first model, the Roadster (see Daimler Takes 10% in Tesla, Helps with Model S Launch). General Motors has said it's committed to launching the plug-in hybrid Chevy Volt next year despite its financial trouble.
Obama announced the proposal at a press event in Washington, D.C. and touted it as a good compromise among automakers, unions, environmental groups and states such as California. The proposal not only would set stricter fuel efficiency standards, but it also is the first to set emissions rules for cars and trucks.
California has sought a waiver from the federal government in order to implement its own, stricter rules on tailpipe emissions, but couldn't get it under the Bush administration (see EPA Rejects California Vehicle-Emission Standards). Thirteen other states and the District of Columbia have said they would adopt what California has come up with. The stricter rules on tailpipe emission would prompt the use of more fuel-efficient cars and fuels that emit less pollution than gasoline.
Automakers have fought any state mandate, arguing that it couldn't afford to build different models in order to satisfy different state rules. But many of them also have realized that they would have to accelerate the development of low-emission cars for the U.S. market.
California's Air Resources Board adopted a low-carbon fuel standard last month that aims to reduce greenhouse gas emissions to the 1990 levels by 2020. The new standard is designed to encourage the use of biofuels, though critics said the policy would a requirement to measure emissions from land-use changes would hurt the biofuel industry (see California Adopts Low Carbon Fuel Standard).
Obama has made solving this standoff between the states and the auto industry a priority since he took office (see Obama: Cars Need to Improve Gas Mileage by 40%). But instead of granting California the waiver, he brought the feuding parties together to come up with a compromise.
The proposed, which is closely aligned with California's own policy, new standard would apply to all new passenger cars and trucks with model years 2012 to 2016. Passenger cars would have to reach 39 miles per gallon from the current 27.5 miles per gallon by 2016. Light trucks would have to bump it up to 30 miles per gallon from the roughly 23 miles per gallon today.
Obama said the proposal would save 1.8 billion barrels of oil over the lifetime of those cars.
But a change in federal fuel economy also would add about $600 to a car, reported the Washington Post. The proposal calls for the Department of Transportation to draft the new fuel economy standards and the Environmental Protection Agency to create the new emissions regulation.