Obama Unveils New Fuel Economy Standards

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President Obama today (July 29) formally unveiled new fuel-economy standards, saying the stepped-up miles-per-gallon requirements represent the most significant step that the U.S. has taken to wean itself off foreign oil.

The Wall Street Journal reported that the President, speaking at a convention center in the nation’s capital, said that with gasoline prices “killing people at the pump,” the new fuel standards will help people save money.

The new proposal by the Obama administration would increase corporate average fuel economy, or CAFE, to 54.5 miles a gallon between 2017 and 2025.

Several automakers disclosed their support for the regulations. Scott Becker, a Nissan Motor Co. senior vice president of administration and finance, called the proposal’s fuel-economy and emissions targets “extremely challenging,” but said the company “is up to the task.”

Chrysler Group LLC said it supports the agreement, reached with the auto industry and environmentalists, “in principal” and as part of a continuing program. As part of the agreement, regulators agreed to a review of the costs and progress of achieving the goals before some of its toughest conditions on pickup trucks and SUVs take effect.

The leeway for trucks had been a sticking point for Japanese auto makers, which rely far less on larger trucks and more on cars and smaller sport-utility vehicles and pickup trucks for their profits than do Detroit auto makers.

The new proposal calls for a 5% average annual increase in fuel economy for cars and a 3.5% increase for light trucks through 2021. After 2021, both cars and trucks face a 5% annual increase.