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Proposed Fuel Economy Rules Would Threaten One Million U.S. Jobs

Oct 07, 2016

More than 1.1 million U.S. workers would lose their jobs because of tougher fuel-economy regulations coming next decade, if prices at the gasoline pump remain low in America. A study recently released by the Center for Automotive Research (CAR) found that if fuel prices stay low, consumers would not get the return on investment when purchasing vehicles with more expensive fuel-saving technology.

Auto manufacturers are working to improve the fuel efficiency of their vehicle fleets in order to reach the currently mandated CAFÉ standard of 54.5 miles per gallon by 2025.

Peter Welch, President of the National Automobile Dealers Association (NADA), recently testified at the House Energy and Commerce joint subcommittee hearing on the Midterm Review for CAFÉ standards. He urged lawmakers and regulators to keep the issue of consumer affordability at the forefront of the debate over increasing fuel-economy standards for new cars and trucks. He pointed out that not only are internal combustion engines becoming more efficient, but dealers currently sell more than 75 different models of hybrid, plug-in electric and battery electric vehicles.

Mr. Welch testified that the average price of a new vehicle has risen to more than $34,000, and the average term of a loan (68 months) and monthly payment ($510) are also at historic highs. He made it clear that dealers are in favor of reducing emissions, increasing fuel efficiency and promoting energy independence. But, if the cleaner vehicles become so expensive that they are no longer affordable to the majority of consumers, they will sit on dealers’ lots and do nothing to benefit the environment.

Opponents of the aggressive standards suggest they could be repealed, if Donald Trump were to win the Presidency in November. Other Republican members of the Committee, which is conducting an evaluation to determine whether the existing fuel economy standard should remain the same or be changed, criticized the 2025 standard as unrealistic.

U.S. regulators must decide by April 2018 whether the 2022 through 2025 model-year-requirements are feasible or should be changed.