DETROIT – With fuel prices the lowest they’ve been since the start of the Great Recession, automakers have seen a boom in demand for light trucks and performance vehicles. But while that might be good for the short-term bottom line, it could pose serious problems in the longer-term, as the industry struggles to cope with tough new fuel economy mandates.
Automakers have delivered significant improvements in fuel economy in recent years, but they’ve got a long way to go to meet the 54.5 mile-per-gallon target the federal government has set for 2025. Some industry insiders argue they can’t get there – at least not without pricing vehicles out of the hands of most consumers. The environmental community has countered that this is just a scare tactic and that manufacturers have shown they can deliver fuel-efficient products consumers can afford.
Both sides will have their eyes on Washington this week, the federal government finally expected to release a so-called mid-term review that could decide whether to ease back on the 54.5 mpg target if the goal is determined to be unreasonable.
The review was originally expected to be released last month, and may now be issued this week. Jointly produced by the Environmental Protection Agency, the National Highway Traffic Safety Administration and the California Air Resources Board, it will be the first step in a year-long process of examining the Corporate Average Fuel Economy, or CAFE, goals set to phase in between 2018 and 2025.
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