WASHINGTON, D.C. -

Generating pointed reaction from auto industry associations, the U.S. Environmental Protection Agency and the U.S. Department of Transportation Wednesday formally unveiled their joint proposal to set stronger fuel economy and greenhouse gas pollution standards for model year 2017–2025 passenger cars and light trucks.

What is concerning to the National Automobile Dealers Association revolves around the cost of these vehicles going forward.

“America’s auto dealers support continuous improvement in the fuel economy of the fleet of vehicles that drive on the nation’s roads,” NADA began in its statement. “To this end, we are concerned that adding about $3,000 to the average cost of a car will price millions of Americans out of the market, which could reduce fleet turnover and delay environmental gains.

“This regulation gambles that millions of consumers will be able to afford thousands more for generally smaller, more expensive vehicles that may not meet their needs,” NADA continued. “This policy is contrary to what most consumers are actually buying today, despite the wide availability of more fuel efficient models. We need fuel economy policies that encourage the sales of fuel efficient vehicles, instead of risky mandates that frustrate consumer demand and depress fleet turnover.

Association leadership went on to say, “The No. 1 question that must be asked is: How many people will no longer be able to afford a new vehicle if the government raises the price of a new car by about $3,000? We will analyze the rule with this principal question in mind. We urge Congress to do the same.”

Citing data from the National Highway Traffic Safety Administration and the EPA, the association broke down the average vehicle price increase for consumers from Obama administration fuel economy rules:

—Model year 2011: $91 price increase.
—Model year 2012–2016:  $948 price increase.
—Model year 2017–2025:  $1,946 proposed price increase.
—Total average price increase in 2025: $2,985.

Meanwhile, the Association of Global Automakers also took a cautious approach when considering this proposal.

“Today’s long anticipated notice of proposed rulemaking for developing fuel economy and greenhouse gas emission standards for model year 2017-2025 cars and light-duty trucks brings us another step forward toward the goal of having a long term one national program,” Global Automakers’ president and chief executive officer Michael Stanton said.

“Global Automakers and its members have always endorsed a comprehensive and harmonized national approach to reducing GHG emissions and improve fuel economy,” Stanton continued. “We have been working diligently with the Environmental Protection Agency, Department of Transportation and the California Air Resources Board to create a program that meets our national environmental and energy objectives while providing manufacturers the needed flexibility and lead-time to design and build advanced technology vehicles so they can continue to provide consumers with a full range of vehicle choices.

“Though we need time to review the details of the proposed rule, we are pleased that the agencies have aligned their processes to eliminate redundancies and coordinate schedules to create one harmonized national program,” Stanton went on to say.

Global Automakers represents international manufacturers, original equipment suppliers and other automotive-related trade associations.

“Our members’ market share of both U.S. sales and production is 40 percent and growing. We work with industry leaders, legislators, and regulators to create the kind of public policy that improves vehicle safety, encourages technological innovation, and protects our planet,” Stanton reiterated. “Our goal is to foster a competitive environment in which more vehicles are designed and built to enhance Americans’ quality of life.”

A top executive from a foreign OEM also commented on Wednesday’s developments.

“While challenging, Volkswagen is encouraged that the proposed standards set a single, national fuel economy program for the foreseeable future,” stated Jonathan Browning, president and chief executive officer of Volkswagen Group of America.

“However, Volkswagen would like to see the same flexibilities and alternative compliance paths afforded the heaviest trucks be available to the smallest, already fuel-efficient passenger cars.  Furthermore, the proposal  is not technology neutral and does not encourage the benefits of technologies, like clean diesel, that are available now, affordable to mainstream consumers, and provide immediate fuel economy improvements and CO2 reduction benefits, enhancing our energy security and protecting the environment,” Browning continued.

“A lot of good work has been done, but there is room and a need for some improvements to keep a level playing field for all automakers to attain the challenging new goals. Volkswagen looks forward to expressing these concerns and continuing negotiations with the administration,” he went on to say.

More Details on Federal Proposal

Federal officials began the explanation of Wednesday’s announcement by emphasizing that cars, SUVs, minivans, and pickup trucks are currently responsible for nearly 60 percent of U.S. transportation-related petroleum use and greenhouse gas emissions.

They highlighted that Wednesday’s development is the latest in a series of executive actions the Obama administration is taking to strengthen the economy and move the country forward because “we can’t wait for Congressional Republicans to act.”

When combined with other steps this administration has taken to increase energy efficiency, federal officials contend that this proposal will save Americans more than $1.7 trillion at the pump, nearly $8,000 per vehicle by 2025.

The departments also asserted that these combined actions will reduce America’s dependence on oil by an estimated 12 billion barrels, and, by 2025, reduce oil consumption by 2.2 million barrels per day — enough they think to offset almost a quarter of the current level of our foreign oil imports.

Taken together, the Obama administration contends that these actions will also slash 6 billion metric tons in greenhouse gas emissions over the life of the programs.

The White House went on to stress its proposed standards alone will slash oil consumption by 4 billion barrels and cut 2 billion metric tons of greenhouse gas pollution over the lifetimes of the vehicles sold in those years.

“These unprecedented standards are a remarkable leap forward in improving fuel efficiency, strengthening national security by reducing our dependence on oil, and protecting our climate for generations to come. We expect this program will not only save consumers money, it will ensure automakers have the regulatory certainty they need to make key decisions that create jobs and invest in the future,” said U.S. Transportation Secretary Ray LaHood.

“We are pleased that we’ve been able to work with the auto industry, the states, and leaders in the environmental and labor communities to move toward even tougher standards for the second phase of the president’s national program to improve fuel economy and reduce pollution,” LaHood continued.

The proposed program for model year 2017–2025 passenger cars and trucks is expected to require increases in fuel efficiency equivalent to 54.5 mpg if all reductions were made through fuel economy improvements.

The government calculated these improvements would save consumers an average of up to $6,600 in fuel costs over the lifetime of a model year 2025 vehicle for a net lifetime savings of $4,400 after factoring in related increases in vehicle cost.

Overall, federal officials estimated the net benefit to society from this rule would total more than $420 billion over the lifetime of the vehicles sold in model years 2017–2025.

DOT and EPA leadership insisted Wednesday’s action builds on the success of the first phase of the Obama administration’s national program, which will raise fuel efficiency equivalent to 35.5 mpg by 2016 and result in an average light vehicle tailpipe carbon-dioxide level of 250 grams per mile.

Officials insisted these standards are already in effect and saving consumers money at the pump now.

“Combined with 2011 fuel economy standards and the standards in effect for 2012–2016, today’s proposal represents the most significant federal action ever taken to reduce greenhouse gas emissions and improve fuel economy,” officials declared.

“Taken together, these actions would reduce greenhouse gas emissions by half and result in model year 2025 light-duty vehicles with nearly double the fuel economy of model year 2010 vehicles,” they added.

The national policy on fuel economy standards and greenhouse gas emissions created by DOT and EPA is geared to provide regulatory certainty and flexibility that reduces the cost of compliance for manufacturers while reducing oil consumption and harmful air pollution.

By continuing the national program developed for model year 2012–2016 vehicles, EPA and DOT believe they have designed a proposal that allows OEMs to keep producing a single, national fleet of passenger cars and light trucks that satisfies all federal and California standards.

“It also ensures that consumers will continue to enjoy a full range of vehicle choices with performance, utility and safety features that meet their individual needs,” the agencies asserted.

“The standards will rely on innovative technologies that are expected to spur economic growth and create high-quality jobs across the country,” officials projected. “Major auto manufacturers are already heavily invested in developing advanced technologies that can significantly reduce fuel use and greenhouse gas emissions beyond the existing model year 2012–2016 standards.

“In addition, a wide range of technologies are currently available for automakers to meet the new standards, including advanced gasoline engines and transmissions, vehicle weight reduction, lower tire rolling resistance, improvements in aerodynamics, diesel engines, more efficient accessories, and improvements in air conditioning systems,” they went on to highlight.

The DOT and EPA added that these standards also should spur OEMs to increasingly explore electric technologies such as start/stop, hybrids, plug-in hybrids, and electric vehicles. The model year 2017–2025 proposal reportedly includes a number of incentive programs to encourage early adoption and introduction of “game changing” advanced technologies such as hybridization for pickup trucks.

The proposal released Wednesday follows President Obama’s announcement in July that the administration and 13 major automakers representing more than 90 percent of all vehicles sold in the U.S. have agreed to build on the first phase of the national vehicle program.

EPA and DOT worked closely with a broad range of stakeholders to develop the proposal —including manufacturers, the United Auto Workers, the state of California, and consumer and environmental groups.

There will be an opportunity for the public to comment on the proposal for 60 days after it is published in the Federal Register.

In addition, DOT and EPA plan to hold several public hearings around the country to allow further public input. California plans to issue its proposal for model year 2017–2025 vehicle greenhouse gas standards on Dec. 7 and will finalize its standards in January.

“By setting a course for steady improvements in fuel economy over the long term, the Obama administration is ensuring that American car buyers have their choice of the most efficient vehicles ever produced in our country. That will save them money, reduce our nation’s oil consumption and cut harmful emissions in the air we breathe,” stated EPA administrator Lisa Jackson.

“This is an important addition to the landmark clean cars program that President Obama initiated to establish fuel economy standards more than two years ago,” Jackson continued. “The progress we made with the help of the auto industry, the environmental community, consumer groups and others will be expanded upon in the years to come — benefitting the health, the environment and the economy for the American people.”