Washington, D.C. – Today, the Consumer Federation of America (CFA) submitted comments to the U.S. Environmental Protection Agency (EPA) strongly urging the agency to let the fuel economy standards for MY 2022-2025 stand and that MY 2021 standards should not be revisited. The filing is in response to EPA’s possible reconsideration of the 2022-2025 model year gas emission standards. It draws upon and builds on CFA’s longstanding involvement and expertise on the issue. CFA stated that increasing federal fuel economy standards for cars and light duty trucks, to 42 MPG by 2025, is supported by 79 percent of Americans (68 percent of Republicans), and opposed by only 18 percent, according to a recent national survey[1] commissioned CFA.
“One reason for the widespread support of higher standards is that a large majority (79%) of those intending to purchase a motor vehicle, think that the vehicle’s fuel economy is important,” said Jack Gillis, CFA’s Director of Public Affairs and author of The Car Book. In part, this concern reflects the genuine belief that gas prices will rise in the future, as evidenced by the price spike seen in the aftermath of Hurricanes Harvey and Irma. When asked to predict the price of gasoline in five years, the average price given by all respondents was $3.90. Today’s average price is $2.54, which is $0.32 more than this time last year.[2]
“Our analysis clearly indicates that the car companies are fully capable of meeting the CAFE standards and they are able to do so with great savings for consumers,” said Gillis. “Rolling back the standards at this point would not only hurt America’s already financially beleaguered consumers, but they would hamper vehicle sales and put U.S. car companies at a distinct competitive disadvantage to the Asian car companies who will meet the standards,” said Gillis.
Fuel Efficiency Doesn’t Cost More—It Saves Money and Sells Vehicles
Congress and the Administration are receiving pressure from the car companies to roll back the nation’s fuel economy standards which they, the unions, consumer groups and environmental organizations agreed to in 2012. They say it costs too much to comply and increased costs won’t be accepted by consumers and sales will drop. “Nothing could be further from the truth,” said Dr. Mark Cooper, Senior Fellow, Consumer Federation of America.
When CFA looked at actual fuel efficiency and increases in MPGs among newly introduced vehicles, improvements in MPGs more than pay for themselves. Among the “all-new” 2017 vehicles[3] – the ones which manufacturers have had a chance to make fuel economy improvements we found:
- 27% (21) of the “all-new” vehicles introduced in 2017 actually cost less than their 2011 version and got 1-10 MPG better fuel economy.
- When calculating 5 years of fuel costs (using lower than current gas prices), nearly half of these 2017 vehicles cost less to buy and fuel than their 2011 counterparts.
- 58 of the 79 vehicles increased in price, however;
- 15% (12 of 79) had fuel savings that offset the entire price increase;
- 52% (41 of 79) had fuel savings that offset the increased cost of fuel economy technology;
- 6% (5 of 79) were more expensive in 2017 but their fuel economy stayed the same or decreased from 2011.
Benefits Far Outweigh the Costs
Looking at the cost/benefit average for these 79 “all-new” models—the added cost of fuel economy averaged $320 per vehicle but will save the buyer an average of $946 over the next 5 years, putting $626 back into consumer pocketbooks.
Consumers are Buying the More Fuel Efficient Vehicles
Comparing the sales figures for 2016 SUVs and light duty trucks with the 2011 models, those that increased in fuel efficiency by over 10% sold nearly 20% more vehicles than those with a less than 10% increase in fuel efficiency.
Car Companies on Track to Comply
Auto manufacturers are making good progress in complying with the law:
- 70 percent of the “all-new” 2017 vehicles had a CAFE-compliant trim, compared to 41 percent of the “all-new” 2015 vehicles.
- A record breaking 6 vehicles are compliant all the way to MY 2025.
- In looking at all of the 2017 models, “gas guzzlers” getting below 14 MPG are a miniscule 0.4% in 2017, down from 8.5% in 2011.
- A record 78% of the “all-new” light duty trucks had a CAFE compliant trim for 2017. Percentage-wise, trucks beat cars for CAFE compliance in 2017.
- 15 of the 17 manufacturers improved their CAFE compliance rate from 2015 to 2017.
The standards are readily achievable for a variety of reasons:
- The cost of current compliance is below the NHTSA/EPA projections and far below inflated industry estimates.
- The standards are well within the technological capabilities of the industry, as determined by NHTSA, EPA, but also MIT and the National Academy of Sciences.
- The rate of improvement is consistent with historical periods where standards were implemented.
- The standards are consistent with (or slightly below) other advanced industrial nations.
- And most importantly, fuel economy sells.
Fuel Economy Standards Have Saved Billions
“Fuel economy standards are one of the biggest consumer pocketbook issues the Trump Administration faces,” said Dr. Mark Cooper, Senior Fellow for CFA.
Gasoline and diesel fuel oil, the two sources of energy most directly affected by the standards, are a major consumer expense, representing over 3 percent of total household expenditures. Typically, it is about the 6th largest household expense. Cooper said, “Keeping the 2021-2025 standards in place would provide the following benefits:
- Net savings of over $4,500 per household;
- A reduction in operating cost of $150 billion;
- $150 billion of macroeconomic growth; and,
- $50 billion in environmental, health and other benefits.”
Contact: Jack Gillis, 202-737-0766
The Consumer Federation of America is a nonprofit association of more than 250 consumer groups that was founded in 1968 to advance the consumer interest through research, advocacy, and education.
[1] The survey was conducted for CFA by ORC International, which interviewed a representative sample of 1,008 American adults by landline or phone on July 13-16. The margin of error for the survey is plus or minus three percentage points.
[2] According to AAA.
[3] Only about 10% of each model year represents these “all-new” vehicles.