It's too soon to set fuel economy standards out to 2025.
In May, President Barack Obama directed the EPA and the Department of Transportation to set light-vehicle standards beyond 2016. By the end of the month, the administration is expected to issue a preliminary proposal to develop fuel economy standards for the 2017-25 model years.
Despite the industry's need for a firm timetable with sufficient lead time to develop technology and models that can meet new standards, setting those standards for 15 years from now would be foolhardy.
Complicating the matter is a campaign by a coalition of environmental groups trying to pressure the Obama administration to adopt an aggressive standard of 60 mpg by 2025. What many forget -- or choose to ignore -- is that the industry is on the threshold of an era in which consumers can choose from a growing selection of electric vehicles and plug-in hybrids that use the kinds of technology necessary to make a quantum leap from the 2016 light-vehicle standard of 35.5 mpg to 60 mpg just nine years later.
The public's appetite for the Nissan Leaf, Chevrolet Volt and Mitsubishi i-MiEV, which arrive soon, will signal whether electrification is a viable option for achieving tough new standards. If the public goes for EVs in a big way, accounting for a significant share of new-vehicle sales, then a 60-mph standard by 2025 is reasonable and achievable. Adding significantly higher fuel prices could create a ravenous appetite for EVs, which would mean achieving a fleet average of more than 60 mpg.
But if consumers reject EVs as too impractical or too expensive, a 60-mph standard would wreak havoc by forcing the industry to produce vehicles that consumers refuse to buy.
Automakers and suppliers already are developing technology to meet tougher standards. At an industry conference in August, Hyundai Motor America CEO John Krafcik said his company's U.S. vehicle lineup will achieve an average of 50 mpg by 2025 -- and do it with 80 percent of its fleet using gasoline engines and 20 percent using electric, hybrid and other alternative-fuel powertrains.
But that gap between 50 and 60 mpg will be vast without consumer buy-in.
Rather than shoot from the hip, the Obama administration should measure market forces before locking in a distant target that can't be hit.