DETROIT -- An Obama administration proposal to nearly double today's fuel economy standards could end up tacking on $5,000 to the sticker price of a new vehicle, a top official with the National Automobile Dealers Association says.
The proposal, which seeks to raise the corporate average fuel economy to 54.5 mpg by the 2025 model year, would force automakers to adopt costly fuel-saving technologies that could eventually price some buyers out of the new-car market, says Don Chalmers, chairman of NADA's government relations committee.
A study NADA will release next month will show that the costs associated with the proposed higher fuel-economy standards will exceed the government's projections by more than 60 percent, meaning consumers will pay on average $5,000 more for a 2025 model than they do today, Chalmers said last week at a public hearing on the proposed standards here.
The hearing was one of three scheduled for this month, giving the public a chance to comment on the proposed rules before they're finalized this summer.
The proposal has received the backing of 13 major automakers, the UAW and several environmental groups.
Volkswagen AG and Daimler AG have opposed the proposal because it offers no new incentive for diesel cars.
U.S. regulators estimate the new 2017-25 model year standards will cost about $2,000 more per vehicle upfront, but buyers will save from lower gasoline costs in the long run.
Many others at the hearing voiced support for the proposed rules, saying the proposal would help save car buyers money, decrease emissions and reduce the nation's dependence on foreign oil. General Motors, Ford Motor Co. and Chrysler spoke in support of the proposal.
Mitch Bainwol, president of the Alliance of Automobile Manufacturers, said consumer buying habits will test whether the industry can realistically meet the proposed standards. The Alliance, an industry trade group, represents 12 automakers, including the Detroit 3.
Said Bainwol: "Looking into the future, consumer purchasing patterns will be the biggest unknown."