car manufacturing

Cost of US fuel-efficiency standards 'much cheaper than estimated'

US fuel-efficiency standards for cars that were introduced under President Barack Obama could cost manufacturers up to 40 per cent less than previously estimated, a report has claimed.

If accurate, the report could present a challenge to automakers who have lobbied strongly against the implementation of the standards, largely on the grounds of excessive cost.

Technologies like turbochargers, advanced transmissions and use of lighter materials - such as aluminium instead of steel - could reduce compliance costs by between 34 and 40 per cent per vehicle from 2022 through 2025, according to the report by the International Council on Clean Transportation (ICCT), an independent research group.

“All of those evolutionary changes, just getting a few per cent here and a few per cent there from those, allow more cost-effective implementation of the regulations," said the report’s principal author, Nic Lutsey.

Instead of an average cost of $875 per vehicle for incremental technology needed to meet the new standards, as compared with 2021 standards, estimated by the US Environmental Protection Agency (EPA), the ICCT’s analysis of available data is for an additional cost of $551.

Under former Democrat President Barack Obama, the EPA and the National Highway Traffic Safety Administration, in cooperation with the California Air Resources Board (CARB), negotiated the rules with automakers in 2012.

They were aimed at doubling average fleet-wide fuel efficiency to 54.5 miles per gallon by 2025, although the real-world mileage figures would be much lower. The ICCT report assumes 35 mpg in 2025 versus a fleet average of 26 mpg today.

Republican President Donald Trump, who took office in January, last week ordered a review of the standards that many in the industry expect will lead to a relaxation of the fuel-efficiency targets or a slowdown in their implementation.

Automakers, through their lobbying groups, have said the Obama rules were too expensive and could cost American jobs.

California is expected to press forward with the Obama administration rules at a CARB meeting being held this Thursday and Friday.

The ICCT, which has offices in Washington, San Francisco and Berlin, has worked closely with CARB and the EPA before and played a key role in revealing that German automaker Volkswagen AG installed secret software in vehicles to beat diesel emissions tests.

The new ICCT report also finds that further emissions reductions are possible on a similar pace from 2025 to 2030, assuming a higher percentage of electric and plug-in hybrid vehicles on the road.

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