Obama Announces Increased Fuel Efficiency Standards for Cars and Light-Fleet Vehicles That Will Create Jobs and Save Consumers Money

By: Megan Robinson

On July 29, President Barack Obama announced  increased miles per gallon (MPG) standards for cars and light-fleet vehicles. The National Highway Traffic Safety Administration (NHTSA) is raising the average MPG standard for model years 2017-2025, requiring a 54.5 mpg fuel efficiency by 2025 for cars and light -fleet vehicles. This latest phase of fuel economy standards will result in a total savings of 3.5 million barrels of oil a day by 2030.

In commenting on the agreement, Alliance President Kateri Callahan said, “American consumers will reap the economic benefits of new and more efficient technologies, our nation will reap the energy security benefits that accrue with reduced reliance on imported oil, and all peoples of the world will benefit from the environmental improvements that stem from lowered energy consumption.”

These standards increase the previously established mileage standards that Obama urged the NHTSA to make in 2009. These new standards build upon the proposed standards for medium- and heavy-duty trucks.

Obama was joined in this announcement by leaders of 13 of the United States’ largest auto-manufacturing companies, accounting for over 90% of vehicles sold in the United States. Two years ago, these competing manufacturing companies came together to sign an agreement to raise their MPG averages and joined the president to show their support of the further increase of MPG standards.

These improved standards will create jobs in alternative fuel manufacturing, save consumers money and reduce the emission of harmful pollutions that lead to climate change. 

“This is another important step toward saving money for drivers, breaking our dependence on imported oil and cleaning up the air we breathe,” EPA Administrator Lisa P. Jackson said in a White House press release.  

Photo Caption: Obama and the 13 auto manufacturer representatives including reps from GM, Ford and Chrysler, who Obama individually praised for their fuel efficiency efforts.

Job Creation

Citing an example of job creation birthed from the increased fuel efficiency standards, Obama named  A123 as an example of a company that created hundreds of jobs because of the increased demand for the hybrid car batteries it manufactures. Dan Borgasano, Public Relations Manager of A123, said the demand for their products, especially electric car batteries, has grown significantly since the passing of stricter fuel efficiency standards and the signing of a manufacturing agreement in 2009.

The increased demand, Borgasano said, has  increased so much that A123 recently opened a new manufacturing plant in Michigan. The new plant created a significant number of new jobs and the company recently hired their 1000th employee, and were hoping for thousands more in the coming years.  

Significant Consumer Savings

Transportation costs are the second-highest expense for most American households.

“The problem is getting worse, the demand for oil is rising far faster than supply,” Obama said.

With U.S. gas prices still soaring high, fuel-efficient American vehicles are required to keep costs lower for American families. A White House Report states that compared to a 2010 model vehicle these new MPG standards would save families an estimated $8,200 in fuel over the lifetime of a new vehicle. Additionally, the report cites that consumers will save an estimated $1.7 trillion total dollars in fuel costs over the life of their vehicles.

Environmental Benefits

Obama  cited the numerous environmental benefits these increased standards will have. The standards will reduce carbon dioxide pollution by over 6 billion metric tons over the lifetime of the program, which is equivalent to the emissions from the United States last year, according to White House Report “Driving Efficiency: Cutting Costs for Families at the Pump and Slashing Dependence on Oil.”

These benefits will continue to grow as older, less efficient vehicles slowly become replaced by newer ones. He stated that these improvements “will protect [the] air while reducing the carbon pollution that is affecting our climate.”

The president concluded by thanking the auto manufacturers and policy makers for their commitment to improving fuel efficiency and reiterated that their efforts were leading future generations into a more prosperous America.