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Ford, GM, Chrysler Asked to Study Fuel Economy Rules of 56.2 MPG

Automakers including Ford Motor Co. (F) and Toyota Motor Corp. (7203) that sell vehicles in the U.S. may have to boost car and light truck fuel economy to an average 56.2 miles per gallon by 2025 under a White House proposal presented last week.

In separate meetings with Ford, General Motors Co. (GM) and Chrysler Group LLC on June 22, the Obama administration asked the three largest U.S. automakers to analyze the effects of a 56.2 mpg fuel-economy target, two people familiar with the talks said.

That represents an improvement of about a 5 percent per year in each company’s fleetwide average fuel economy from 2016 when they are required to have a 35.5 mpg average for vehicles sold in the U.S. The Detroit News reported the administration’s plan yesterday.

Republicans including Environmental Protection Agency administrators for every Republican president since Richard Nixon joined other Republicans this week in requesting Obama to write “aggressive” fuel economy standards for 2017 to 2025, the years covered by the rule now being drafted.

Increasing fuel economy by the amount proposed could cost at least $2,100 per vehicle, according to a document prepared last year by the EPA and National Highway Traffic Safety Administration, who have said they will publish a proposed rule by Sept. 30. California’s Air Resources Board is also helping write the rule and was represented at this week’s meetings, according to the people familiar with the talks.

Sales of GM’s Chevrolet Aveo, the brand’s smallest car, jumped 67 percent in April, according to Autodata. Photo: Chevrolet via Getty Images Close

Sales of GM’s Chevrolet Aveo, the brand’s smallest car, jumped 67 percent in April,... Read More

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Sales of GM’s Chevrolet Aveo, the brand’s smallest car, jumped 67 percent in April, according to Autodata. Photo: Chevrolet via Getty Images

Rigidity of Jello

“We continue to work closely with a broad range of stakeholders to develop an important standard that will save families money and keep the jobs of the future here,” Clark Stevens, a White House spokesman, said in an e-mail. “A final decision has not been made, and as we have made clear we plan to propose that standard in September.”

Any number being floated now is early in the process, Greg Martin, a spokesman for Detroit-based GM, said in an interview.

“There’s a way to go in this process,” said Martin, who said he doesn’t know what the White House said in the meeting. “Any number out there right now has the rigidity of Jello.”

Christin Baker, a spokeswoman for Ford, based in Dearborn, Michigan, also declined to comment on this week’s talks.

“Our discussions with the administration are ongoing and productive,” she said in an e-mail.

Spokeswomen for Chrysler, based in Auburn Hills, Michigan, and the Alliance of Automobile Manufacturers, which represents automakers from around the world, didn’t immediately respond to requests for comment placed outside of regular business hours.

Environmental groups including the Natural Resources Defense Council are pushing for a 62 mpg standard by 2025, saying increasing the fuel economy average will help U.S. automakers regain market share they lost to foreign competitors who sold more smaller cars in the U.S.

“We’re cautiously optimistic,” NRDC Transportation Program Director Roland Hwang said about the 56.2 mpg proposal in an interview. “That’s a good number as long as there aren’t any loopholes by the automakers” such as making most of the improvements in the later years of the rule, Hwang said.

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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