The Obama administration, operating under the aegis of the National Highway Transportation Safety Administration, has finally issued the first of its eagerly-awaited decisions on changes to the Corporate Average Fuel Economy (CAFE) ratings. It's the first such update since the mid-'80s and comes at the most critical time in the history of the auto industry. For 2011, NHTSA has deemed that the combined car/truck index will go up by 8 percent -- or two mpg -- to a collective 27.3 mpg average. Individually, the new target for passenger cars will be 30.2 mpg, compared to the current 27.2 mpg while the light-truck figure is set to rise from 23.0 to 24.1 mpg. According to NHTSA estimates, those changes will save some 887 million gallons of fuel over the lifetime of 2011 model year cars and trucks while reducing CO2 emission by 8.3 million metric tons over the same period.
Unlike previous CAFE averages which were identical for all manufacturers, the 2011 system is the first to establish individual mileage bogeys for each automaker based on the size of various models in its specific lineup. On the car side, that leads to numbers ranging from 28.2 mpg for Chrysler to 31.2 mpg for Porsche while truck stats run from 24.0 mpg for Nissan to 26.7 mpg for Mitsubishi. The rationale for issuing only 2011 requirements focused on the fact that that any new CAFE regulation must be in place 18 months ahead of the model year it will impact. Although the outgoing Bush administration elected to pass on making any decision, NHTSA still was faced with the looming March 31, 2009 compliance deadline. With its attention now turned to requirements for the subsequent 2012-2015 period, the group says it will consider both the financial condition of the auto industry as well as "energy and climate change needs," in an attempt to comply with mandates set by the Energy Independence and Security Act (EISA) of 2007 to lower our dependence on all petroleum products, but specifically on imported oil.
Under terms of the EISA, CAFE standards must be set high enough to ensure that the combined industry-wide average of all new passenger cars and light trucks is at least 35 miles per gallon by model year 2020. NHTSA estimates that compliance with the more demanding 2011 regulations will cost the industry approximately $1.5 billion and add an average of $64 to the price of a car and $126 to a light truck. It believes that the projected cost of fuel and fuel savings will allow car buyers recoup that amount in 4.4 years and truck buyers break even in 7.7.
Still unsettled is the issue of whether California and the 17 other states fighting to enact their own, even more stringent emissions regulations will be allowed to proceed with their efforts. The Bush administration had actively blocked California's attempts to initiate these tougher greenhouse gas mandates that would, by their very nature, require vehicles to achieve even higher fuel economy than under fed-spec laws. The Obama administration has indicated a more sympathetic stance towards the broader question, although virtually all parties agree that the ideal answer lies in creating one unified standard.