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Cars May Need to Boost Fuel Economy to 62 MPG by 2025

U.S. automakers may be required to almost double vehicle fuel economy to as much as 62 miles per gallon by 2025 models, the Obama administration said in a technical analysis released today in Washington.

The government projects increasing fuel standards 3 percent to 6 percent a year, starting with 2017 models, according to an analysis that starts a review that will end in mid-2012. A 6 percent annual gain would result in the 62 mpg standard, while 3 percent would lead to 47 mpg by 2025, according to the report.

Environmentalists are pressing for more aggressive targets after President Barack Obama in a rule last April required automakers to meet 5 percent annual increases, building to 35.5 mpg for 2016 models. The auto industry said today’s analysis is preliminary and will change. In May, Obama ordered agencies to develop a time line and potential targets for 2017-2025 models.

“We must, and we will, keep the momentum going,” Transportation Secretary Ray LaHood said today in a statement. The National Highway Traffic Safety Administration, part of his department, helps set the targets.

Today’s notice establishes a final rule by July 31, 2012, with a proposal completed by Sept. 30, 2011. The administration plans a more detailed analysis by Nov. 30.

Photographer: Tomohiro Ohsumi/Bloomberg

Ray LaHood, U.S. transportation secretary. Close

Ray LaHood, U.S. transportation secretary.

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Photographer: Tomohiro Ohsumi/Bloomberg

Ray LaHood, U.S. transportation secretary.

The report is “based on very preliminary and incomplete data at this point, and inevitably will change,” said Dave McCurdy, chief executive officer of the Washington-based Alliance of Automobile Manufacturers. “We will carefully review the technical assessment’s assumptions.”

The alliance represents companies including General Motors Co., Chrysler Group LLC and Ford Motor Co.

A 6 percent increase “will be the biggest single step the United States can take to cut global warming and our oil addiction,” said Dan Becker, director of Washington-based Safe Climate Campaign, in a statement today. “This proposal represents the triumph of technology over intransigence.”

To contact the reporter on this story: John Hughes in Washington at jhughes5@bloomberg.net.

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net.

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