Cost of mpg fuel standards could be 40% lower, report says

DETROIT -- The cost to implement tough fuel-efficiency standards for cars imposed by the Obama administration for the first half of the next decade could be up to 40 percent lower than previously estimated using existing conventional technologies, according to a report from a nonprofit group released on Wednesday.

If accurate, the report could present a challenge to automakers which have lobbied strongly against the implementation of the standards largely on the grounds of excessive cost.

Technologies such as turbochargers, advanced transmissions and use of lighter weight materials -- such as aluminum instead of steel -- could reduce compliance costs by 34 percent to 40 percent per vehicle from 2022 through 2025, according to the report by the International Council on Clean Transportation, an independent research group.

"All of those evolutionary changes, just getting a few percent here and a few percent there from those allow more cost-effective implementation of the regulations, the report's principal author, Nic Lutsey, said.

Instead of an average cost of $875 per vehicle for incremental technology needed to meet the new standards, as compared with 2021 standards, estimated by the EPA, the ICCT's analysis of available data is for an additional cost of $551.

Under President Barack Obama the EPA and the National Highway Traffic Safety Administration, in cooperation with the California Air Resources Board, negotiated the rules with automakers in 2012.

They were aimed at doubling average fleet-wide fuel efficiency to 54.5 miles per gallon by 2025, although the real-world mileage figures would be much lower -- the ICCT report assumes 35 mpg in 2025 versus a fleet average of 26 mpg today.

President Donald Trump last week ordered a review of those standards which many in the industry expect will lead to a relaxation of the fuel-efficiency targets or a slowdown in their implementation.

Automakers, through their lobbying groups, have said the Obama rules were too expensive and could cost American jobs.

California is expected to press forward with the Obama administration rules at a CARB meeting being held Thursday and Friday.

The ICCT, which has offices in Washington, San Francisco and Berlin, has worked closely with CARB and the EPA before and played a key role in revealing that German automaker Volkswagen AG installed secret software in vehicles to beat diesel emissions tests.

The new ICCT report also finds that further emissions reductions are possible on a similar pace from 2025 to 2030, assuming a higher percentage of electric and plug-in hybrid vehicles on the road.