White House pushes automakers to agree to 54.5 mpg target by 2025

By Neil Roland, Automotive News

Washington DC -- The White House is pushing automakers to agree by tomorrow to a corporate average fuel economy target of 54.5 mpg by 2025 -- a figure 1.7 mpg less than the 56.2 mpg standard it floated earlier this month.

The easing of the White House plan stems from a concession to makers of light trucks and SUVs, and particularly larger vehicles in that segment, such as Ford's F-150 pickup, sources said.

The latest White House proposal, the most definitive of any it has put forth, calls for a 5 percent annual mileage increase for cars from 2017-2025, said industry and congressional officials who asked not to be named because their discussions with the White House are confidential.

For light trucks and SUVs, the average yearly increase would be 3.5 percent from 2017-2021. After that, the annual figure would rise by 5 percent, industry and congressional sources said.

Some lawmakers have been briefed this week by the White House on the status of its negotiations with automakers.

Within the light truck class, the average annual increase would be lower than 3.5 percent for heavier vehicles and higher than 3.5 percent for lighter vehicles, industry officials said.

Mid-course review

Under the White House proposal, the targets would be subject to a mid-course review to be completed well before 2022, they said.

That means both the 5 percent annual increase in fuel efficiency for cars and plans to ratchet up the 3.5 percent figure for trucks and SUVs would be evaluated for their impact on industry costs, technology and sales.

The administration wants to submit an agreement with automakers and California state regulators to the US Office of Management and Budget for review in coming weeks, before issuing it as a proposal in September.

The final rule is to be adopted in July 2012, the White House has said.

The White House wants the industry as a whole -- particularly Ford Motor Co. and General Motors -- to agree to the latest proposal, which was made this week to individual automakers one-by-one.

The rest of the industry is leaning toward following the lead of Ford and GM, sources said.

A White House spokesman declined comment today on the new proposal, which was reported earlier by The Wall Street Journal.

Progress reported

The 2017-25 targets would build on a standard of 35.5 mpg for 2016 that was agreed to by the Obama administration, automakers and California regulators.

"Ongoing discussions are yielding progress and we appreciate the careful and constructive approach by all parties," GM spokesman Greg Martin said today. "We are hopeful there is a path forward that greatly improves vehicle fuel economy while preserving customer choice and future industry growth."

Ford declined to comment today but the automaker has issued conciliatory statements about the White House's evolving plan in recent weeks.

The California Air Resources Board, which can legally walk away from any agreement between the Obama administration and automakers, did not immediately comment today.

Environmentalists, consumer advocates and science groups have been pushing for a 2025 target of between 56 mpg and 62 mpg.

From Automotive News (A Crain publication)