Motor Vehicle Fuel Efficiency

An Analysis of Consumer Savings and Automaker Progress On the Road to 2025 CAFE Standards

By Jack Gillis and Richard Eckman

This report evaluates the direct consumer savings, and automaker progress, associated with the 2025 CAFE standards. It is in response to current efforts by certain members of Congress and the current Administration to roll back those standards. The rationale for the rollback is that it costs too much to comply with the standards and, as a result, vehicle prices will increase, thus dissuading consumers from buying new cars. The fact is, rolling back the standards would not only cause great harm to consumer pocketbooks, but, because of consumer demand for fuel efficiency, would also harm sales.

Our analysis shows that Congress and the Administration would be making a serious mistake in rolling back the standards. Not only would the impact be immediately felt by already financially strapped Americans, but it would put the U.S. car companies at a distinct disadvantage, both nationally and globally, in competing with the Asian manufacturers, who are quite capable of complying with the standards. As this report will demonstrate, not only do fuel economy standards pay off in lower ownership and operating costs, but the carmakers are fully capable of meeting the standards at a reasonable cost, and improving fuel economy improves sales.

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