New Fuel Economy Law Calls for 35.5 MPG Average by 2016

Stocks in the auto industry have been in the green all day today, bolstered by encouraging sales numbers, but kept at bay by the Obama administration putting into effect the final rules today.

A summary is as follows:

• The new standards are to take effect for model years from 2012 - 2016;
  
  
• By 2016, average fleet fuel economy should be 35.5 MPG [mile per gallon];
  
  
• Tailpipe emmissions should be 250 grams of CO2/mile...equivalent to what autos meeting the mileage standard would achieve;
  
  
• Each auto company would have a different target based on the mix of its vehicles;
  
  
• Government estimates have the changes adding about $434/vehicle for 2012, and $926/vehicle by 2016;
  
  
• Estimates have about 1.8 billion barrels of oil saved over the life of the program;
  
  
• 960 Million metric tons also saved...the equivalent of taking 50 million cars and trucks off of the road; and
  
  
• According to Dow Jones, the new rules will cost the automakers $52 billion over the life of the program, lower than previous estimates of $60 billion.

Though the initial bill was passed in September 2010, the final rules were implemented today. Although the cost of owning a new vehicle will go up by just under $1000 by 2016, the government expects that you will save enough at the pump to more than pay for the premium.

“America needs a roadmap to reduced dependence on foreign oil and greenhouse gases, and only the federal government can play this role,” said Dave McCurdy, president and CEO of the Alliance of Automobile Manufacturers. “Now we need to work on 2017 and beyond.”

However, with all coffee does not come the cream...“With tight family budgets and a shaky job outlook, consumers want to maximize their transportation dollars, not pay more for redundant rules and an unnecessary bureaucracy,” said Ed Tonkin, chairman of the National Automobile Dealer Association.

Keep your eyes on the auto's, though more fuel efficient cars and trucks that are already in the works.

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