February 28, 2012

Obama Tells Auto Workers He’s with Them Today, Leaves Out Billions of Dollars of Regulations Coming in 2014 and 2017

Today, President Obama addressed the United Auto Workers to tout the $85 billion government bailout of the auto industry. The President failed to mention his Administration is mandating some of the most expensive regulations in U.S. history aimed directly at the auto industry.

Final Medium and Heavy Duty Truck Rule

The Environmental Protection Agency and Department of Transportation finalized in September 2011 the first ever rule regulating mileage for medium and heavy duty trucks. Beginning in 2014, trucks will be required to achieve up to a 20 percent reduction in fuel consumption by model year 2018.

The rule affects Combination Tractors, Heavy-duty Pickup Trucks and Vans, and Vocational Vehicles. The impact will be broad based: regulating these vehicles will affect small business, cities and towns that purchase emergency vehicles like firetrucks and ambulances, and recreational vehicle owners. Everything, from delivery vans to full size pickups to even school busses will be hampered by these new environmental requirements. At a time when building strong, safe vehicles in America should be a priority; these new regulations are making it harder.

From 2014 – 2018, the cost of a pickup truck will increase on average $500, and every medium and heavy duty truck will be about $1,000 more. The total cost of the rule to the truck manufacturing industry is $8.1 billion.

Proposed Light-Duty Vehicle Fuel Economy Standards

In November 2011, the Environmental Protection Agency and the National Highway Traffic Safety Administration proposed new Corporate Average Fuel Economy (CAFE) standards. Beginning in 2017, the rule requires automakers to raise the minimum average fuel economy of cars they sell in the U.S. to 54.5 miles per gallon by 2025. The current standard is 27.5 miles per gallon.

By the EPA's estimate, the rule will cost $141 billion. Compliance will translate into a spike in sticker prices of at least $2,000 to $2,800, according to official projections. And The Wall Street Journal writes, “Vehicles that currently cost $15,000 or less will effectively be regulated out of existence.” The rule is expected to be finalized in August 2012.

Issue Tags: Energy, Economy