EPA May Soften 2025 Fuel Economy Standards To Let Americans Keep Their Trucks & SUVs

March 18, 2015

Four years ago, the Environmental Protection Agency unveiled a plan to boost fuel economy dramatically by the year 2025. Though things aren't progressing as quickly as some had hoped, a few months ago, the EPA insisted that automakers can still achieve a 54.5 mpg fleet-wide fuel economy within ten years.

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According to Detroit News, though, the agency may be preparing to roll back its expectations -- and its regulations. What's changed? 

  • Gas is relatively cheaper than it was during the 2008-2010 model-years (the timespan on which the EPA plan was based). The drop in prices stems largely from new refining methods that have boosted domestic oil production, and it has had two interesting effects.

1. Less focus on energy independence: Part of the impetus for developing more fuel-efficient vehicles came from a desire to reduce U.S. reliance on foreign oil. With increased U.S. production, that's become less of an issue. (In fact, the U.S. is now a net exporter of oil.) 

2. Less demand for extreme fuel economy: When the price of gas was sky-high during and immediately after the Great Recession, consumers were fixated on ditching gas-guzzlers and buying extremely fuel-efficient rides. Though efficiency remains the #1 criteria for today's auto shoppers, folks may be willing to accept less of an improvement on a new car than before. 

  • Electric cars are off to a slower start. They seem to be picking up a bit of steam, but for now, cost, efficiency, and charging infrastructure haven't encouraged a significant number of shoppers to make the switch to hybrids or electric cars. We'll see how things change over the next few years as those vehicles get cheaper, battery range improves, and more options for shoppers emerge. 
  • Consumers return to big vehicles. Demand for trucks and SUVs is skyrocketing -- not just because gas is cheap, but also because those vehicles are more fuel-efficient than they once were. Those sales stats skew the EPA regulations because there are different fuel economy standards for trucks and larger vehicles (44 mpg) than for cars (62 mpg). The EPA rules were written at a time when it looked as if smaller cars would become dominant, but if the percentage of larger vehicles being produced and sold by automakers increases, the EPA would need to alter its rules to accommodate that shift, likely lowering fleet-wide fuel economy expectations. 

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If there's any change in EPA policy, it would affect the standards applied to the 2021-2025 production years. We'll keep you posted when -- and if -- that happens.

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