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Auto Regulators’ Move to Freeze Fuel Efficiency and Pollution Rules Will Hurt Consumer Pocketbooks, Public Health

Thursday, August 2, 2018

WASHINGTON – The National Highway Traffic Safety Administration (NHTSA) and Environmental Protection Agency (EPA) today issued proposed rules that would roll back fuel economy and greenhouse gas pollution rules for cars and light trucks after model year 2020. The proposal also seeks to prevent states from protecting their citizens from harmful air pollution. Consumer Reports, the advocacy division of Consumer Reports, criticized the proposal as a boon for automakers, who asked the government to weaken the rules, and a huge loss for consumers. Such a rollback will cost consumers up to $100 billion more to keep their gas tanks full and harm public health due to the increase in harmful emissions.

“Rolling back these successful rules is a serious mistake that will cost consumers dearly. This program has sparked innovations resulting in cars and trucks that are cleaner, safer, faster, and offer more comforts and luxuries, all while saving consumers billions,” said David Friedman, Vice President, Advocacy, for Consumer Reports. “Given this administration’s dramatic lack of progress on auto safety, and the auto industry’s proven ability to improve safety and fuel efficiency at the same time, it is troubling at best that this rollback was made under the guise of safety.”

To meet the existing rules, automakers have invested in fuel saving technologies for new cars and trucks while also delivering more comforts, safety, and horsepower. For example, the Ford F-150 gets 36 percent better fuel economy than it did in 2004 while cutting its 0-60 mile per hour acceleration time by 1.5 seconds, and achieving a Top Safety Pick rating from the Insurance Institute for Highway Safety. All of these efficiency technologies pay for themselves and more. Were the rules allowed to meet their planned levels by model year 2025, new vehicle buyers would save about $3,200 per car and $4,800 per truck or SUV over the life of that vehicle, even after accounting for the cost of adding the fuel saving technologies. These calculations are based on cost estimates EPA developed using detailed “teardown” studies that were lauded by the National Academies in their 2015 report. In contrast to what is contained in the proposal, the National Academies report recommended that the use of such an approach be increased.

“Boosting fuel economy can save fuel and lives. The justification for rolling back standards relies on inflated cost numbers and a failure to account for how automakers price entry level vehicles,” said Friedman. “Blocking all progress after 2020 and lowering pollution targets will undermine consumer savings, weaken our economy, and put the brakes on automaker innovation,” Friedman said.

Surveys from Consumer Reports show that car and truck buyers care about fuel economy and want to spend less on gas. A survey released this week found that 74% of Americans agreeing that increasing average fuel economy from 25 mpg today to 40 mpg by 2025 is a worthwhile goal. And as consumers plan to continue the shift toward larger vehicles, a strong majority (78 percent) agree that making larger vehicles such as SUVs or trucks more fuel-efficient is important.

Research from the University of Tennessee and Oak Ridge National Laboratory has shown that improvements in highway safety and improvements in fuel economy have gone hand in hand. The National Bureau of Economic Research also found that fuel economy standards reduced fatalities by cutting out the weight in heavy vehicles that make crashes more dangerous. Further, automakers maintain a lower price for entry-level vehicles in order to continue to attract new car buyers, so as fuel economy increases, automakers have not, and would not be expected to raise the price of such vehicles in a way that compromises sales.

Car and truck buyers highly value fuel economy and are willing to pay a premium for improved fuel economy, according to a recent study commissioned by Consumer Reports and conducted by Dr. Christine Kormos at the Simon Fraser University and Dr. Reuven Sussman at the American Council for an Energy-Efficient Economy (ACEEE).  On average, consumers indicated they would spend over $1,000 more on a vehicle to save $100 per year in fuel costs–or nearly $700 for each additional mile per gallon (MPG). The study also found that consumers value fuel economy significantly more than acceleration and premium features when considering purchasing a vehicle.

“By gutting these fuel efficiency rules, federal regulators and automakers are ignoring what consumers want and are putting the brakes on the significant progress that has already been made,” said Shannon Baker-Branstetter, Senior Policy Counsel for Consumer Reports. “The law requires fuel economy standards in order to save fuel, and yet this proposal does just the exact opposite.Thanks to emissions and efficiency rules, consumers have saved billions of dollars on fuel over the last 5 years and pollution has dropped. Rather than capitalize on this progress and continue with plans to strengthen fuel efficiency and cut pollution, this move by regulators will ultimately leave consumers footing a higher bill.”

A fact sheet about how improvements in auto safety and improvements in fuel economy have gone hand in hand is available online here.