A new ruling requires US automakers to more than double average fuel economy by 2025 in a move that will push up prices for cars but more than offset the cost in fuel savings, but the longer-term effect will be to benefit the hybrid car industry.
The new CAFE (corporate average fuel economy) requirements released on Wednesday aim to reduce US oil consumption by 12 billion barrels by 2025.
“By the middle of the next decade, our cars will get nearly 55 miles per gallon, almost double what they get today,” Obama told US media in an e-mailed statement. “It’ll strengthen our nation’s energy security, it’s good for middle class families and it will help create an economy built to last.”
Specifically, the new rules apply to vehicles manufactured between 2017 and 2025 and are the culmination of a deal cut with automakers last November. Under the ruling, US automakers must improve car fuel economy by an average of 5% annually for passenger vehicles, and 3.5% for trucks.
More than anything, though, the rules serve as incentives for natural-gas-powered and electric hybrid cars, which haven’t been faring as well as hoped lately. To this end, CAFE offers some extra incentives.