New fuel economy rules

NADA pegs cost of compliance at $5,000 per car

The U.S.’ National Automobile Dealers Association (NADA) is sending out the warning that proposed fuel economy rules for future vehicles will have an adverse impact on the overall economy.

The statement came at a public hearing held jointly by the Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA), looking into amending fuel economy rules for model year 2017-2025 vehicles.

“To work, fuel economy rules must require improvements that are affordable,” said Don Chalmers, chairman of NADA’s Government Relations Committee. “According to EPA and NHTSA, the cumulative cost of all of their fuel economy rules will raise the average price of a vehicle by $3,200. This is not pro-consumer.

“While EPA and NHTSA can mandate what automakers must build, no one can dictate what customers will buy. If our customers do not purchase these products, we all lose,” he added.

Chalmers also questioned the government’s estimated $3,200 per vehicle price increase as being too low. NADA is researching and preparing a study, available in early spring 2012, that indicates the cost to consumer’s may be as high as $5,000 per vehicle, on top of the estimated retail price increase of as much as 60% in the proposed time frame. The study reportedly quotes how the EPA under-estimated the cost impact of 2002-2010 medium and heavy-duty truck emissions by a factor of three.

With new auto sales rebounding from a low of 10.4 million in 2009 to 12.7 million last year, Chalmers cautions that proposed fuel economy standards for the 2017-2025 model year could have real economic consequences if consumer demand is not fully taken into account.

Chalmers did acknowledge that model year 2017-2025 fuel economy rules are not due until April 1, 2015, so there is plenty of time to study the impacts more closely.

“Rushing to set costly new standards nearly three years early will unnecessarily and unhelpfully forgo the opportunity to learn how consumers react to the aggressive new standards now being put into place,” Chalmers said.

Tags: 2017, EPA, fuel economy, NADA, nhtsa