New Fuel Economy Standards: 54.5 MPG by 2025

By Dan Collins on 28 August 2012
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The U.S. government finalized fuel economy standards Wednesday mandating a mean 54.5 MPG fuel economy rating (4.35 l/100km) across manufacturers’ product lines by 2025. The Corporate Average Fuel Economy (CAFE) standards have been in place since 1975 and carmakers whose fleets do not meet the prescribed fuel economy rating are penalized. The U.S. Department of Transportation and National Highway Traffic Safety Administration say the new standard will not only protect the environment and save Americans money, but will also promote domestic job growth in the automotive and clean energy sectors.

The increase to 54.5 MPG by 2025 will follow the 2016 CAFE standards of 36.6 MPG. An NHTSA statement on Wednesday said that the move is poised to reduce Americans’ consumption of foreign oil by 12 billion gallons and the increase in fuel economy will have the same effect as a $1 per gallon reduction in the price of gas.

The Alliance of Automotive Manufacturers, a group of 13 automakers from the U.S. and overseas, supported the executive branch and the new standards. Criticism of the new standards include claims that the standards will add up to $3000 to the purchase price of vehicles and the cost savings only applies if fuel prices remain at current levels.

The 54.5 MPG standard is lower than the 56.2 target originally sought, and translates to a real-world average of 40 MPG, considering calculation methods for traditional and alternative-fuel vehicles such as plug-in hybrids. Before 2011, when the CAFE figure began increasing to meet the 2016 standards of 34.1 MPG, the standards were unchanged since 1990 at 27.5 MPG.