The U.S. government’s new proposal to double the fuel efficiency of cars by 2025 may cost up to $157 billion to implement and may add $2,000 to the price of new passenger cars, two federal agencies said.
The National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) have posted on their websites that the new Corporate Average Fuel Economy (CAFE) standards would render cars more expensive with $2,000 on average per each new passenger car sold by 2025.
The price increase will be caused by the price of developing new fuel-saving technology. However, the NHTSA predicts the costs of new standards will be offset by benefits of $419 billion to $515 billion. According to President Obama, the rule would also reduce U.S. dependence on foreign oil. The White House says the fuel standards will save 12 billion barrels of oil and will reduce oil consumption by 2.2 million barrels a day, roughly one-fourth of the oil the country imports. It will also save consumers more than $8,000 a vehicle in fuel costs by 2025.
The proposed rule, which would go into effect in 2017, requires annual fuel-economy increases of five percent for cars until 2025, when automakers would have to reach an average of 55.4 mpg for passenger cars. The current CAFE standard is 30.2 mpg. For light trucks like pickups and SUVs, fuel economy would have to be raised by 3.5 percent the first five years. After that, the 5 percent rule would apply to these vehicles as well.