Automakers Wait To See If MPG Rule Sticks

The auto industry is on stand by as they await the release of a new government report that will indicate whether strict gas mileage regulations will remain in place. The current benchmark required by the government's Corporate Average Fuel Economy (CAFE) standards, states that all new cars and trucks sold in the U.S. must average 54.5 mpg by 2025.

The current fuel mileage rating required by CAFE standards is 34 mpg. Many manufacturers are calling this sudden jump to averaging over 50 mpg while current regulations only require them to average over 30 mpg too ambitious of a goal to meet in just nine years. 

But while they are on the hook for the mileage mandates that run through 2021, requiring new vehicles in their fleets to average 41 mpg by that time, automakers will have a chance to push for lower mandates when federal regulators conduct a mid-term review of the CAFE rules that will occur from 2022 through 2025. This report will be jointly produces by the Environmental Protection Agency, the National Highway Traffic Safety Administration, and the California Air Resources Board.

Should any manufacturer fail to meet these requirements, they will be fined  $5.50 for every tenth of a mile per gallon that their fuel economy misses the mark by, multiplied by the total volume of vehicles in the fleet that failed to meet regulations. 

Automakers have already made adjustments to their current cars, including aerodynamic changes, turbochargers, 10-speed transmissions, and has led to more and more cars being offered as hybrid and electric options. For example, many of Ford's new F-Series trucks are offered with EcoBoost V-6 engines instead of the thirstier V-8s that have powered these trucks in the past. But according to many industry executives, the needle is dipping towards E when it comes to finding other alterations companies can make to save fuel.

All eyes will be on Washington D.C. this week, anticipating whether or not the government rules that the 54.5 mpg target is an unattainable goal. But either way, John Mendel, executive vice president for American Honda Motor Co., told TheDetroitBureau.com that his company is "moving ahead as planned," whether the 54.5 mpg standard gets rolled back or not.