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New Obama fuel mileage and emissions standards: sell that SUV for a hybrid now?
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President Barack Obama, in conjunction with U.S. car manufacturers, the United Auto Workers Union, and critical U.S. and state politicians, has created a new fuel efficiency and carbon emissions standard for U.S. car makers, which will begin in 2016. An increase of $1,300 per new vehicle is expected for cars sold in the U.S. by 2016. Obama stated Tuesday while announcing this plan that decreased gas consumption would compensate for the higher price tag per vehicle. His estimate claimed it would take only three years to pay off the investment and would, over the life of a vehicle, save at least $2,800 through enhanced gas mileage.
While requiring that vehicle carbon dioxide emissions be reduced by about one-third by the target date, the plan sets the new average gas consumption rate to 35.5 miles per gallon. Under this proposed initiative, the overall auto fleet average would have to reach 35.5 mpg by 2016, with passenger cars reaching 39 mpg and light trucks showing 30 mpg, under a new system that develops standards for each specific vehicle class size.
This is the first time government regulations have been linked to emission and fuel standards. The plan would effectively end year of dispute between automakers and statehouses over an array of state emission standards. Obama's plan gives several states the higher standard for emissions they requested, but also sets a single national standard, sought by auto makers for reaching economies of scale. This is the first presidential administration to seriously pursue a major initiative in this regard, as the debate on this issue has continued in vain since President Carter’s administration in the late 1970s.
In general, the proposal is project to reduce 1.8 billion barrels of oil over the lifetime of the vehicles sold in the next five years, equivalent to removing 177 million cars from the roads over the next 6 1/2 years. In that period, the savings in oil burned to fuel American cars, trucks and buses is estimated at last year's combined U.S. imports from Saudi Arabia, Venezuela, Libya and Nigeria, counties with rogue regimes which have caused national security problems in the past.
Obama’s plan was supported in his speech by stating consumers will pay less for fuel, preventing less money from going overseas and keeping more money in the US. He went on to say that the economy as a whole runs more efficiently by using less oil and producing less pollution. The president alluded to the point that the new incentives will lead to much-needed job creation, as plants pursue new technology and increased customer base associated with the new requirements.
However, as major U.S. auto makers such as GM, Chrysler and Ford struggle to keep afloat and close numerous plants and car dealerships, they are not in a position to fully capitalize and build new facilities for constructing more fuel efficient vehicles with less emissions. If anything, this proposal will lead to foreign companies such as Toyota and Honda, with more fuel efficient pre-existing manufacturing lines, to jump on the opportunity.
This is no time to panic and trade in your gas guzzling SUV for an electric car or hybrid. The government is not forcing consumers to trade in or sell their current vehicle, which does not meet the standard but rather requiring new cars sold in the U.S. to meet these green standards. Actually, Chrysler is offering cars up to $7000 off at dealers which will be closing due to its bankruptcy plan, which still may be worth the purchase since this green standard does not take root for 7 years.
It will likely be better to purchase a new greener vehicle closer to the deadline when prices have been reduced as the industry has absorbed more of the R&D costs and dealt with increased competition. Also, the technology will be more mature closer to 2016 and possibly any potential reduced safety issues of smaller vehicles would have been minimized.
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For more info: See White House website: http://www.whitehouse.gov/
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