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Car Makers Have Technology to Meet 60 MPG Saving 44B gallons

Mandating a 60-MPG standard could reduce gas consumption by 44 Billion gallons = to taking 70 Million cars off the road

Consumer Federation of America (CFA) released a new report this month that clearly shows stronger pollution and fuel efficiency standards that result in 60 miles per gallon by 2025 as critical and necessary for consumer pocketbook protection. This is not only good news for consumers' pocketbooks, but also means less pollution, less oil dependency, and a stronger, more competitive auto industry which can save American manufacturing jobs.

Moving the standard to 60 mpg will add hundreds of billions of consumer savings and reduced greenhouse gas emissions by hundreds of millions of tons. The report, Setting the Next Round of Fuel Economy Standards: Consumers Benefit at 60 Miles Per Gallon, is available at: http://www.consumerfed.org/elements/www.consumerfed.org/File/60mpg_Study090210.pdf

The 60 mpg by 2025 serves as one of the best examples of why good environmental and clean energy policy go hand-in-hand with lowering consumer fuel bills and restoring American industry to a leadership position. The Obama Administration plans to release a Notice of Intent for 2017-2025 light duty fuel economy standards on September 30.

Mark Cooper, Director of Research at the Consumer Federation of America (CFA), and author of the report, has responsibility for analysis and advocacy in the areas of telecommunications, media, digital rights, economic and energy policy and has provided expert testimony in over 250 cases for public interest. The CFA is a non-profit association of over 280 consumer groups that was founded in 1968 to advance the consumer's interest through advocacy, research, and education.

Cooper commented, "Previous fuel economy standards have left huge consumer savings on the table. A 60 mile per gallon standard in 2025 will capture those enormous benefits and provide important protections for American consumers." Mark Cooper is available for interviews on Monday, September 15-30 and can also discuss the following:

  • Without stronger standards, American automakers could fall behind in the global race for the clean car market, putting even more manufacturing jobs at risk. As recent reports by the business consulting firm McKinsey and Company show and others, the U.S. auto industry is locked in a global race to dominate the market for clean, advanced technology vehicles. In the 1970s, the U.S. auto industry fell asleep at the wheel when it came to building fuel efficient cars and ceded huge market share to Japanese companies like Toyota and Honda. In the 1990s, while the U.S. auto industry chose to build Hummers rather than hybrids, it once again, fell behind in leadership to Toyota and Honda on hybrids. In the 2010's, without stronger standards, the U.S. auto industry risks losing ground to the fast rising Chinese auto industry.

  • The report includes a consumer pocketbook analysis, which finds that for consumers purchasing 60 mpg cars and trucks the value of the gas savings will be greater than the increased cost of the loan.

  • Consumers will save money in the first year of ownership, and their purchase, when financed by a five year auto loan, will be cash neutral in the first month.

  • A 60 mpg vehicle will save the typical car buyer over $1,000 in gas costs over and above the increased car cost by the time the auto loan is paid off (typically 5 years) and $3,000 over the life of the vehicle (roughly ten years), which the consumer could capture in the sale price of the vehicle or by holding on to it.

  • The report combines estimates of technology cost from the National Academy of Sciences and MIT with the costs benefit analysis previously prepared by the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) to derive its estimates of what is technologically feasible and economically justified. The Energy Information Administration's projected price of gasoline for 2025 of $3.50 (in 2010 dollars) is used. For the consumer pocketbook analysis, a five-year auto loan at 7 percent interest is assumed (which is the average auto loan rate for the past 20 years).

  • The report identifies a reluctant automobile industry as the biggest obstacle to achieving the greatest consumer benefits through higher fuel economy. "The approach taken by NHTSA in the past allowed the ill-informed plans of automakers to restrain the levels of standards," according to the report.
  • "One of the reasons that the administration must set targets so far in advance is that the industry has been slow to adjust to the clear consumer demand for greater fuel economy," Cooper explains. "We must set our sights on a higher mid-term goal like 60 mpg by 2025 to get the industry moving in the right direction."

    Making cars and trucks go further on a gallon is the cleanest, cheapest, and fastest way to meet our energy needs. It will reduce our dependency on oil from the Middle East while cutting emissions of greenhouse gas and other pollutants. Passenger cars, minivans, pick-ups, and SUVs are the single biggest consumer of oil, accounting for about 40 percent of our oil consumption. To help break our oil addiction, we must raise the efficiency of our cars and trucks.

    Mark Cooper is Director of Research at the Consumer Federation of America (CFA) www.consumerfed.org, where he has responsibility for analysis and advocacy in the areas of telecommunications, media, digital rights, economic and energy policy. He holds a PhD from Yale University and is a former Yale University and Fulbright Fellow. Dr. Cooper has provided expert testimony in over 250 cases for public interest clients including Attorneys General, People's Counsels, and citizen interveners before state and federal agencies, courts and legislators in almost four dozen jurisdictions in the U.S. and Canada.

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