The federal government has a screaming deal for automakers that have struggled to find a market for electric vehicles: Two for the price of one.
In the 2017 through 2019 model years, regulators will count each EV produced as two when calculating whether automakers are meeting new fuel-economy standards for light vehicles.
The standards, finalized in August after a year of discussion, have a simple-sounding goal: cut fuel consumption and emissions. But the rules -- at 1,994 pages and more than half a million words, they are roughly the length of War and Peace -- are anything but straight- forward, filled with little-known peculiarities and fine print added to help get automakers on board.
Each automaker's vehicle fleet ultimately will have to average at least 54.5 mpg -- unless gasoline prices drastically change, new technologies emerge, consumers behave differently or any other assumptions that the government made while drafting the rules turn out to be way off. On top of that, the 54.5 mpg figure is based on strict federal testing criteria, with real-world fuel economy expected to be around 40 mpg.
And, five years from now, the government could decide that the standards are too difficult or costly and change the game again.
"This is a very confusing rule," says Sandy Stojkovski, president of Scenaria Inc., a consulting firm that is helping manufacturers prepare for the new standards. "There's a lot of complexity involved with this."
There also is a lot of expense involved -- about $150 billion for the industry, according to the Obama administration. The National Highway Traffic Safety Administration says the average light vehicle will cost $2,556 extra by 2025, not adjusted for inflation, though it believes the new rules would end up saving consumers as much as $5,000 over a vehicle's lifetime by using less fuel. The National Automobile Dealers Association, which waged a last-ditch battle against the rules, argues that prices for new cars and light trucks will rise about $3,000, with automakers spending billions exploring new powertrains and other ways of saving fuel.
"Throughout 2017-2025, substantial capital investments will be necessary to meet consumer demand for more fuel-efficient vehicles, to incorporate new technologies that consumers want, and to be competitive in the marketplace," Christin Baker, a Ford spokeswoman in Washington, wrote in an e-mail.