President Obama submitted a proposal to double corporate average fuel economy standards to 54.5 mpg by 2025. He made the announcement side by side with the chiefs of U.S. and import-brand automakers, including Ford Motor Co.'s Alan Mulally, General Motors' Dan Akerson and Chrysler Group's Sergio Marchionne.
Officials from BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota and Volvo were present. UAW President Bob King also attended the event.
If these targets are finalized next July, it would continue the pace at which mileage standards were increased by the Obama administration from 2012-16. This present standard needs a corporate average of 35.5 mpg by 2016, an increase from 27.3 mpg for 2011 models.
These newest targets stand for one of the largest jumps in fuel-efficiency targets since the government made fuel-efficiency standards in the 1970s to lessen dependence on foreign oil.
The Obama plan has the support of leading auto manufacturers, California state regulators, the UAW, environmentalists and consumer advocates.
This plan asks for a 5% improvement each year in the fuel economy of passenger cars from 2017-25. Mileage standards for light trucks would rise by 3.5% a year from 2017-21, with a 5% annual increase tentatively planned for the rest of the period.
Detroit automakers consider these new targets for light trucks as a victory. This is because they depend on a heavier mix of large pickup and SUV models for sales and profits.
The Obama administration granted the auto industry’s requests and also agreed to a mid-course review of the standards beginning in 2018 to reflect on their impact on manufacturers' costs, technology and sales. The White House said that automakers supported the proposal that affect over 90% of all vehicles sold in the U.S.