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A bumpy road to greater fuel efficiency

Marketplace Staff Apr 1, 2010

A bumpy road to greater fuel efficiency

Marketplace Staff Apr 1, 2010


Kai Ryssdal: So here’s something that might drive down our demand for oil down. Those new fuel efficiency standards the federal government announced today. By 2016, passenger cars sold here are going to have to get an average of 39 miles a gallon. For light trucks and SUVs, 30 MPG. Those new figures are about a 30 percent increase over the old ones.

But as Brett Neely reports now from Washington, there may be some bumps along the road to higher mileage.

BRETT NEELY: Today’s new fuel efficiency rules mean small is beautiful, says Roland Hwang at the Natural Resources Defense Council.

ROLAND HWANG: Those days of continuing escalating size of vehicles, the bigger the better, those days are over.

Smaller cars are already more fuel efficient and cheaper to build. So car makers may switch their mix of models towards making more of them. That’s one reason why Fiat took control of Chrysler. The government says new cars may cost about a $1,000 more because of the new rules.

But, the numbers don’t add up for David Cole at the Center for Automotive Research, which gets some industry funding.

DAVID COLE: When you look at the reality of the future power trains, whether we’re talking about plug-in hybrids, the battery technology, you’re looking at really very, very high costs, certainly in the area of $3,000-$5,000.

In addition to more expensive cars, there’s another potential pothole for the auto industry, says Rebecca Lindland at the forecasting firm IHS Global Insight.

REBECCA LINDLAND: These kinds of fuel economy standards will push a lot of product onto the consumer that they don’t really want.

She says what Americans think of as small isn’t what the rest of the world thinks of as small. Drivers may have traded in their Hummers for something more modest, but Lindland says many won’t squeeze into a subcompact just yet.

That’s not what the auto industry wants to hear as it ramps up production of smaller, cleaner cars.

Gloria Bergquist is with the Alliance of Automobile Manufacturers.

GLORIA BERGQUIST: It’s a real concern for automakers because we’re investing millions and millions of dollars in these technologies.

She says the industry is willing to do its part by making more fuel-efficient cars, including new hybrids and electric cars. Now it’s up to consumers to buy them.

In Washington, I’m Brett Neely for Marketplace.

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