While President Barack’s Obama administration and automakers battle it out over the target for new fuel efficiency standards, a new white paper suggests it will lead to millions fewer cars sold and 220,000 lost jobs.
President Barack Obama behind the wheel of a new Chevy Volt during his tour of the General Motors Auto Plant in Hamtramck, Mich. (Official White House Photo by Pete Souza)
The paper’s author, Dean Drake, from the Michigan-based Defour Group says federal regulators now meeting with automakers behind closed doors are considering increasing the standards to as high as 56 mpg to 62 mpg over for model years 2017-2025.
Drake confirmed a U.S. Energy Information Administration estimate that automakers could sell 2.4 million (approximately 14 percent) fewer new vehicles if standards are set to hit 62 mpg by 2025. “Clearly, sales losses of this magnitude could be expected to lead to job losses in the industry,” said Drake.
The debate is over the Corporate Average Fuel Economy (CAFE) standards, now set at 56 mpg by the year 2025, that are designed to help boost fuel efficiency and reduce greenhouse gas emissions for all new cars and trucks sold in the United States starting in 2012.
Drake bases the study’s job loss numbers on the National Highway Transportation Safety Administration (NHTSA) analysis of the 2012-2016 MY CAFE standard that said that one job would be lost by the OEMs and their suppliers for every 11.3 new vehicle sales which fail to sell. The study also calculates dealerships job losses as a result of fewer new car and truck purchases.
“These projected job losses will not be offset by the development of new technologies creating so called ‘green jobs’ as many contend,” said Drake. “The advanced technology vehicles such as electrics will only make up a small part of the new vehicle fleet. Plus there is no guarantee that these new jobs would stay in the United States.”
Corporate Average Fuel Economy (CAFE) is the sales weighted average fuel economy, expressed in miles per gallon (mpg), of a manufacturer’s fleet of passenger cars or light trucks with a gross vehicle weight rating (GVWR) of 8,500 lbs. or less, manufactured for sale in the United States, for any given model year. Fuel economy is defined as the average mileage traveled by an automobile per gallon of gasoline (or equivalent amount of other fuel) consumed as measured in accordance with the testing and evaluation protocol set forth by the Environmental Protection Agency (EPA).
