First Collision

Is CAFE's 54.5 mpg Goal No Longer a Reality?

Car manufacturers report that they indeed can achieve the coveted 54.5 mpg corporate average fuel economy (CAFE) targeted for the 2025 model year, but buyer preferences for SUVs and trucks are going to make it impossible, according to U.S. regulators. At First Collision, we want a cleaner planet for everyone, so pursuing the 54.5 mpg goal is something all of us here in Baytown, TX want for our customers, the community and the rest of the world.

The EPA, California Air Resources Board and National Highway Traffic Safety Administration all generated a Technical Assessment Report recently outlining all of the costs, technology and other issues involved in the industry’s pursuit of reducing greenhouse gas emissions. The initial goal stated in this report was scheduled as part of their 2011 agreement to lower emissions in cars and enhance fuel economy by the 2025 model year.

The good news is that through these CAFE efforts, we are now living in a less-polluted country overall. The automotive industry is adopting fuel economy technologies at extraordinary rates, according to a recent assessment. The statement also reports that car manufacturers have been able to adhere to the present regulations for about nearly the same cost or even less than what the government projected four years ago. In addition, the report says automakers will be able to meet standards with major enhancements in standard gasoline engines, and likely won’t need to rely heavily on sales of hybrids and/or electric cars.

In summary, the ambitious but now reachable 54.5 mpg goal is no longer on the table, because every type of vehicle has its own proposed mpg, based on their size and weight. Lower gasoline prices have kept the overall demand for SUVs, crossovers and other light trucks higher than initially anticipated. This means that the advances in fuel economy technology won’t be reflected fully in the fleet averages, which are sales-weighted. People want bigger cars and are not afraid to pay for them, so this trend has changed the new CAFE mpg requirements in a huge way.

Senior administration officials told reporters on a conference call last month that the 54.5 mpg goal was never a law, but more of an approximation of where the industry could be by 2025. Their initial numbers were based on an assumption that 67 percent of the market would consist of passenger cars and 33 percent would be SUVs, crossovers, pickups and other light trucks.

Now the government estimates that the overall fleet average fuel economy will come in between 50 mpg and 52.6 mpg by the deadline of 2025. The new approximations assume a more even split between cars and trucks in the marketplace, but that too is simply speculation.

Sources: EPA, California Air Resources Board and National Highway Traffic Safety Administration