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BMW / Obama's EPA Seeks 56.2 MPG By 2025

Obama's EPA Seeks 56.2 MPG By 2025
How much will a 56.2-mpg Corporate Average Fuel Economy standard cost consumers? On average, $6714 per car (in 2008 dollars), says the Center for Automotive Research in Ann Arbor, Michigan. "This model requires a 20 percent PEV (plug-in electric) market share to meet the standards-drastic by any measure," CAR says in its analysis.The Obama administration is expected to formally propose in September the second strictest of four proposed standards to succeed the 2011-2016 ramp-up to 35.5 mpg. Thanks to the rather convoluted math that has plagued CAFE for decades, these numbers do not really mean every automaker's fleet must average 35.5 mpg in 2016 or 56.2 mpg in 2025. CAFE uses an S curve to determine the fuel-efficiency increases necessary across the automotive spectrum.

A 56.2-mpg standard assumes a 5-percent cut per year in CO2 emission in an automaker's fleet. The most lenient proposal would have cut CO2 by 3 percent per year, to 47 mpg by 2025, while the standard that environmentalist groups most favored would have cut CO2 by 6 percent per year, to 62 mpg.

CAR says the 47-mpg standard would have added $3744 per vehicle. A 4-percent per year/51 mpg standard would have added $5270 per vehicle, and the highly green 62-mpg standard would have added $9790 per vehicle.

Shortly before the administration proposed its CAFE standard, a Boston Consulting Group survey found that, based on consumer demand, gas internal-combustion engines will remain the predominant source of power in North America through 2020.

The 2010 North American powertrain mix was 95-percent gas internal-combustion, 3-percent hybrid electric vehicle and 2-percent diesel. In nine years, it will be 88-percent gas if oil costs $130 per barrel, and 85-percent gas if it costs $180 per barrel, BCG says.

Hybrids would account for 7 percent whatever the price of oil, as would diesel at 2 percent and compressed natural gas at 1 percent. Electric vehicles, including plug-in hybrids and such range-extenders as GM's Voltec technology, would take 2 percent of the market if oil costs $130, or 5 percent if it's $180 per barrel. The U.S. market would at least have to quadruple its electric-vehicle consumption in five years to meet CAR's projections for the proposed CAFE standard.

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