CAFE Rules Will Increase Vehicle Prices $1,800 by 2025: Study
But consumers will save at the pump
New fuel economy and emissions standards will lead to job losses and increased prices for vehicles in the next several years, according to a study conducted by Indiana University.
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Vehicles are expected to become more expensive every year over the next eight years, reaching the point where consumers will spend an extra $1,800 per vehicle by 2025 due to the new rules. As drivers stop buying more expensive vehicles, job losses are expected to reach their peak at about 150,000 in 2021.
The study was funded by the Alliance of Automobile Manufacturers, a group that has been critical of the fuel economy rules for a long time. The alliance is made up of 12 automakers including BMW, FCA, Ford, General Motors, Jaguar Land Rover, Mazda, Mercedes-Benz, Mitsubishi, Porsche, Toyota, Volkswagen, and Volvo.
In the long term, the picture looks a little better. Consumers will end up saving more money on gas, and by 2031, a net gain of 150,000 jobs could be reached.
Just before President Donald Trump took office, regulators locked in fuel economy standards through 2025. But automakers have called on Trump to roll back the rules, citing costs as a major concern. In January, Ford CEO Mark Fields met with Trump and warned that 1 million jobs could be in jeopardy if new fuel economy rules don't take into account consumer demand.
Source: Bloomberg
When I tell people I write about cars, the most common reply I receive is “Really?” I guess I never strike people as a car type as I drive down the freeway in the right lane going 60 mph in my old SUV. My gripes about driving in city traffic and fast drivers don’t help my case, either. For a time, the only cars I liked were old cars. Not old as in "classic" or "vintage," but as in well-worn. My first appreciation of cars came when I drove a very old Ford pickup. It wasn't perfect: I used a booster seat to reach the gas pedal, and the turn signal once fell off in my hand as I was learning to drive. But the thing I valued most was the memories. It took several years for me to truly become a "car person." Being a long-time writer and an avid reader has helped me develop a healthy curiosity and a desire to know how things work. This has made cars one of the most fascinating points of study for me because they are such intricate machines. I am interested in how cars can reach 200 mph, how they can run on hydrogen, and how they can drive and park on their own. I also enjoy learning how cars can solve problems whether it be in the form of reducing pollution, minimizing traffic, or helping people stay connected on the road. Yes, maybe I’m not a gearhead. Perhaps I’m a car nerd. Either way, I very much enjoy writing about cars and helping people stay in tune with the automotive industry. I wouldn't want to be writing about anything else. And don’t get me wrong: I know how to drool over a hot car. I am fascinated by the Tesla Model S, awed by the Lamborghini Veneno, and am hopelessly obsessed with the Audi R8.
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