Edmunds.com Offers Post-Election Outlook for the U.S. Auto Industry

  Edmunds.com Offers Post-Election Outlook for the U.S. Auto Industry

Business Wire

SANTA MONICA, Calif. -- November 07, 2012

American voters re-elected Barack Obama to four more years in the White House,
but what can the auto industry expect coming out of last night's election?
Edmunds.com offers two perspectives: 1) the greater economic and consumer
outlook, and 2) the impact on the development of green car technology.

Edmunds.com Chief Economist Dr. Lacey Plache looks at the impact on consumer
confidence and behavior:

"The election did not change the short term outlook for auto sales.
Eliminating political uncertainty reduced one small headwind against spending
but the major headwinds -- threatened tax increases and spending cuts at home,
businesses reluctant to hire and a weakening global economy -- still remain.

"The good news is that some forces in the near term expected to drive auto
sales remain in play. Delayed and replacement sales from Hurricane Sandy,
sales from an influx of lease terminations, and increased truck purchases due
to the housing market recovery are still on the horizon. Higher consumer
confidence, buoyed by wealth effectsfrom rising home values and a solid stock
market,will continue to boost sales as well.

"The key question for the medium term is how long this confidence will be
maintained in the face of upcoming changes in tax rates and government
spending. If the fiscal issues get resolved or if progress is being made
toward a solution, decreasing uncertainty could outweigh higher tax burdens
and motivate spending. But there is also a risk that lower disposable income
could restrain consumers once again."

You can read more on Dr. Plache's auto industry outlook for the rest of 2012

Meanwhile, Edmunds.com Green Car Analyst John O'Dell takes a look at what's
next for alternative fuel vehicles in President Obama's second term:

  *With voters giving Obama four more years in the White House, his
    Environmental Protection Agency and National Highway Traffic Safety
    Administration are not likely to entertain any thoughts of backing off on
    the new 2017-2025 Corporate Average Fuel Efficiency (CAFE) standards they
    just spent more than a year drafting. The standard is split into two parts
    - a set of formally adopted rules for the 2017-2021 period that would see
    average fuel economy rise to about 41 mpg; and a proposal - still to be
    approved - for a further increase to almost 50 mpg in the 2022-2025
    period. Special credits that wold give automakers the equivalent of up to
    5 mpg on average would boost the final CAFE goal to the 54.5 mpg that is
    most often cited in discussions about the goals. Certainly, the rules and
    standards that earlier this year were set through 2021 seem safe from
    revision now because federal law requires that new regulations be
    published at least 18 months before they take effect. That would mean that
    the 2017-2021 segment of CAFE would have to be altered before Obama's new
    term would expire in January 2017, and that's not likely. The proposed
    fuel efficiency standards for the 2022-2025 period, however, are less
    certain to be adopted as presently written - there's a mid-term review
    required before formal rules are posted and that won't happen until after
    the next presidential election.
  *The president has never abandoned his goal of bringing electric-drive
    vehicles into the mainstream, and a renewed push to promote plug-in cars -
    hybrids and "pure" battery electrics - can be expected. That might include
    an effort to increase subsidies for plug-in vehicles and to change the
    method from tax credits to direct cash rebates or price reductions - an
    avenue the President championed in a speech earlier this year when he
    called for the present $7,500 EV tax credit to be turned into a direct
    $10,000 rebate.
  *With Energy Secretary Stephen Chu thought to be departing early in Obama's
    second term, there could be a new focus under a new secretary on hydrogen
    fuel cell vehicles - a favored technology under the George W. Bush
    administration and one in which major automakers including General Motors,
    Ford, Toyota, Honda, Daimler and Hyundai all have considerable investment
    and expertise.
  *The administration's support for renewable energy programs could give rise
    to new life for the solar energy industry, and increased availability of
    electricity from solar panels could help promote widespread installation
    of public EV charging stations, which would go a long way toward relieving
    potential buyers of the range limitation worries that now help depress
    electric vehicle sales.
  *Obama has given lip service to developing alternatives to petroleum-based
    fuels during his first term; in this second term - if he can pry funding
    from Congress - and the wind-down of the war in Afghanistan might help -
    there could be a more aggressive push to fund some of the research and
    development needed to get the biofuels industry moving forward.
  *Lending by the Department of Energy from the moribund Advanced Technology
    Vehicles Manufacturing loan program may resume. Although widely
    discredited by Republicans during the campaign and basically abandoned by
    the Obama Administration for most of 2012, the program still has upwards
    of $16 billion available for loans to battery, vehicle and vehicle
    component makers.

Anyone with follow-up questions for either Dr. Plache or Mr. O'Dell, can
contact us any time at pr@edmunds.com or 310-309-4900.

About Edmunds.com, Inc.

At Edmunds.com, we’re committed to helping people find the car that meets
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Edmunds.com Corporate Communications
Jeannine Fallon/Aaron Lewis/Stephanie Mar
Media Hotline: 310-309-4900
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