This is an excerpt from EERE Network News, a weekly electronic newsletter.

August 03, 2011

President Announces Higher Fuel Efficiency Standard

President Obama announced on July 29 that 13 major automakers have agreed to increase fuel economy for cars and light-duty trucks to 54.5 miles per gallon (mpg) by model year 2025. The companies—BMW, Chrysler, Ford, General Motors Corporation, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota, and Volvo—together account for more than 90% of all vehicles sold in the United States. The United Auto Workers and the State of California helped develop the agreement.

The next round of standards builds on the Obama administration's agreement for model year 2012-2016 vehicles. They will raise fuel efficiency to 35.5 mpg. Achieving the new goals will require innovative technologies and manufacturing that will spur economic growth and create high-quality domestic jobs in cutting-edge industries across America. The administration estimates that the standards for model years 2011 to 2025 will save U.S. families $1.7 trillion dollars in fuel costs, and by 2025 will result in an average fuel savings of more than $8,000 per vehicle. Additionally, these programs will save a total of 12 billion barrels of oil.

The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Transportation have worked with auto manufacturers, the state of California, environmental groups, and other stakeholders to ensure these standards are achievable, are cost-effective, and preserve consumer choice. The program would increase the stringency of standards for passenger cars by an average of 5 percent each year. EPA and the National Highway Traffic Safety Administration are developing a joint proposed rulemaking that will include full details on the proposed program and supporting analyses, including the costs and benefits of the proposal and its effects on the economy, auto manufacturers, and consumers. After the proposed rules are published in the Federal Register, there will be an opportunity for public comment and public hearings. The agencies plan to issue a notice of proposed rulemaking by the end of September 2011. See the press release and reportPDF.