Obama Administration Delays Rules on Auto Fuel Economy

The rule proposed by the National Highway Transportation and Safety Administration (NHTSA) and the U.S. Environmental Protection Agency that would require automakers to achieve a miles-per-gallon average of 54.5 across their fleets by 2025 were to have been made final tomorrow. But that is not going to happen.

According to a report at Bloomberg, the rule is still being reviewed and the NHTSA expects that review to be completed “soon.”

The rule originally was opposed by automakers, but they eventually caved to pressure from the White House. A report issued last week by a House committee savaged the proposed rule:

The impact of this process will not be immediate but will be felt by manufacturers forced to make, dealers forced to sell, and consumers forced to purchase far different, more expensive and less safe vehicles.

General Motors Co. (NYSE: GM) and Chrysler supported the new rule, but foreign automakers objected to it, saying it favors makers of light trucks.

The administration expects savings of $515 billion in fuel costs to consumers between 2017 and 2025 as a result of the rule. The increased mileage requirement also is expected to add about $2,000 to the cost of a new car.

Paul Ausick