EPA lowers 54.5 mpg goal: technology is there, but shoppers aren't interested

July 19, 2016

If you're a fan of eco-friendly cars, we have good news, bad news, and good news

The good news is, a new report says that automakers already have the technology they need to achieve the Environmental Protection Agency's bold fuel economy goals for 2025. Issued in 2011, those goals aim for fleet-wide fuel economies of 54.5 mpg. As we've heard before, car companies are making progress on that front.

The bad news? While consumer groups are strongly in favor of the new regulations, consumers themselves are a little more blase. Yes, miles-per-gallon remain a concern for new-car buyers, but thanks to today's low gas prices, shoppers are turning a blind eye to so-so fuel economy and slipping behind the wheels of less-efficient SUVs and trucks.

That's been a boon for auto sales and automakers, which make a tidy profit on larger vehicles, especially pickups. It's also pleased OPEC, which has kept oil prices low to distract consumers from fuel economy worries.

It's not been so great for the EPA, which must balance its environmental concerns with consumer demand. The agency understands that it would do more harm than good to force automakers to produce more fuel efficient vehicles when fewer people are interested in buying those vehicles.

And so, the EPA, the National Highway Traffic Safety Administration, and the California Air Resources Board recently came together to assess the viability of the 2025 goals. This week, the three published a draft version of their "Midterm Evaluation", and as hinted last year, it looks like the bar has been lowered a bit.

Major findings

Though it might seem as if the cards are stacked against fuel efficiency these days, the Midterm Evaluation isn't as gloomy as you'd expect. However, it does offer an interesting take on what's changed in the years since the original goals were published.

  • When the EPA's rules were finalized in 2012, gas prices were high, and experts predicted that by 2025, 67 percent of Americans would drive cars, while the remaining 33 percent opted for trucks. Those projections have now shifted to roughly 52 percent and 48 percent, respectively.
  • Remember above we said there was some more good news? The Midterm Evaluation predicts that automakers will still be able to meet fleet-wide fuel economy of around 50.8 mpg, based on current trends. In the worst-case scenario, it would fall to 50.0 mpg, and in the rosiest, it might even tick up to 52.6 mpg. (Though there will clearly be cars that earn better ratings than that, fleet-wide averages are based on sales, so as truck sales grow, the average falls.)
  • Also good is the fact that automakers won't have to rely on the priciest technologies to hit those marks. In fact, the Midterm Evaluation thinks that most of the fuel savings will come from turbocharging, stop-start, and other measures implemented on gas-powered engines. The Evaluation expects plug-in electric vehicles to make up less than 2 percent of the market, and fully electric vehicles to constitute less than 3 percent.
  • However, the impact of those improvements will hit consumers in the wallet--not the $5,000 predicted by dealers, but around $700 for cars and $1,100 for trucks.

The final recommendations for 2025 won't be approved until 2018. In the meantime, you can read the draft Midterm Evaluation here or the executive summary here.

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