Consumers Endorse Tougher CAFE, Emissions Standards, Study Finds

U.S. consumers widely support future federal fuel-economy rules reaching upwards of 54.5 mpg (4.3 L/100 km) by 2025, despite the fact vehicles then might cost thousands of dollars more, a new study claims.

The Consumer Federation of America says 66% of Americans it surveyed earlier this year expressed support for the tighter rules even if they mean higher sticker prices, and 74% acknowledged the rules as a generally good idea.

The CFA says it polled 1,000 people by telephone in May.

“Consumers have been ravaged by high gas prices, and they are afraid of the (recent) volatility,” says Jack Gillis, director-public affairs at the Washington-based watchdog group.

“High fuel prices have brought damage to consumers’ wallets,” he tells WardsAuto in an interview ahead of the study’s release today.

The CFA says average household gasoline expenditures last year reached a record $2,850, as pump prices averaged $3.53 per gallon, according to the U.S. Energy Information Admin.

Motivated by more fuel-efficient vehicles being offered by auto makers after the Obama Admin. announced the historic standards, consumers more than ever are looking for, and buying, cars and trucks providing relief from high pump prices, the CFA says.

According to WardsAuto data, the fuel efficiency of new light vehicles bought in first-half 2012 averaged 2 3.8 mpg (9.9 L/100 km), up 4.4% from 22.8 mpg (10.3 L/100 km) in like-2011.

Gillis says car buyers’ acceptance of the new rules, which are expected to be ratified this summer, provides further evidence stricter corporate average fuel-economy standards and carbon-dioxide emissions levels are positive for all stakeholders.

That includes auto makers, which for years fought tighter rules on the grounds they would put them at odds with buyers and come at the sacrifice of safety.

U.S. consumers historically have favored bigger, faster cars and trucks, and the lightweight materials necessary to improve fuel economy of those vehicles were seen by the OEMs as less robust or prohibitively costly.

“There was a lot of fear-mongering, but the thoughtful thing about these regulations is they are size-based,” says Gillis. “So if a customer wants a truck, they can buy it and still get better fuel economy.”

Everyone supports (stricter fuel-economy standards), he adds. “The car companies think it will be good for business. The (United Auto Workers union) believes it’s a good thing. So it’s not just consumer groups and environmentalists in support.”

The CFA analysis also indicates consumers will see a payback in the extra dollars they spend for future vehicles with fuel-saving technologies.

Looking at a Kia Rio small car and Ford F-150 large pickup from 2002, the CFA finds the price of those vehicles increased $4,295 and $3,800, respectively, in 2012. But adding fuel savings from new technologies means the new Rio saves $3,335 and the F-150 $5,369.

The CFA research used a future fuel price of a relatively conservative $3.50 per gallon in current dollars, same as the U.S. Environmental Protection Agency when it drew up the rules. The EIA outlook calls for $3.86 per gallon in 2025.

But the study’s claim that the savings from spending less on gas in every case far outweighs the additional cost of a more fuel-efficient vehicle runs contrary to other examinations of the 54.5-mpg standard.

The Center for Automotive Research, for instance, says new technologies to meet the stricter rules would increase the cost of a car by $5,270, and consumers likely would lose at least $3,000 on their purchase.

Ann Arbor, MI-based CAR uses a 2025 gasoline price of $6 per gallon in today’s dollars for its analysis, and includes the cost of items such as electricity for all-electric and plug-in electric vehicles designed to meet the standards.

CAR warns those higher costs could lead consumers to hold onto less fuel-efficient vehicles longer, which it claims would do little toward achieving the rule’s key goal of reducing CO2 emissions. The result would be a “Cuba effect,” CAR says, where the vehicle fleet ages rapidly due to a supply-side shock of mandated costs.

Job losses would be certain, CAR adds, with the auto industry and related sectors bleeding up to 90,000 positions if gas reaches $6 per gallon, or as many as 714,000 if pump prices stay in the neighborhood of $3.50.

Gillis argues the stronger determinant of job health from the new rules would be the economy, not fuel prices, and that support of the standards by auto makers and the UAW reflects the likelihood the industry would grow rather than shrink.

Gillis also admits consumers more easily might accept the notion of high vehicle costs in a telephone survey than when it comes time to write a bigger check at the dealership.

“But what has been missing from that argument is the fact that the increases will occur over time, not tomorrow,” he says. “The extra costs will be as gradual as the fuel efficiency itself. There will not be sticker shock.”

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