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Fuel goals strain carmakers

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Fuel goals strain carmakers

60 m.p.g. standard sought by '25

BY GREG GARDNER

FREE PRESS BUSINESS WRITER

Automakers, already straining to boost their average fuel economy to 35.5 m.p.g. by 2016, are jockeying with environmental groups that are pushing the White House to raise the fuel economy bar as high as 60 m.p.g. by 2025.

As early as Thursday, President Barack Obama may discuss how much better he thinks the industry can do by 2017 and beyond. There will be months of review and public comment before specific new standards are set.

"There's an expectation the president will talk about a range, rather than put forth specific numbers," said Charles Territo, spokesman for the Alliance of Automobile Manufacturers, which represents 12 companies, including, Ford, General Motors, Chrysler, Toyota and Volkswagen.

Earlier this month, the Sierra Club, Environment America and the Natural Resources Defense Council urged the White House, Transportation Secretary Ray LaHood and EPA Administrator Lisa Jackson to raise the average fuel efficiency for the American fleet to 60 m.p.g. by 2025.

59% Support Mileage Target

Tuesday, the Consumer Federation of America echoed that call. The CFA also released a poll of 1,007 people showing that 59% supported the 60 m.p.g. target. Of those surveyed, 75% said they would pay more for a more fuel-efficient vehicle if they could recover the additional cost through lower fuel costs within one year.

According to Mark Cooper, the CFA's research director, Americans would consume only half the gasoline they do today, or 4.5 million fewer barrels a day, if the average car achieved 60 m.p.g. today.

"What is the cost of not doing this?" asked Jack Gillis, CFA spokesman. "For domestic manufacturers, they could suffer a huge cost by losing sales to import makers who do very well in the fuel economy race."

The debate comes as sales of pickups and SUVs are rebounding. Through the first eight months of this year, 72% of Chrysler's U.S. sales have come from pickups, SUVs and minivans. By contrast, light trucks made up 44% of Toyota's and 24% of Hyundai's sales in the same period.

In the next few months, General Motors will begin selling the Chevrolet Volt extended-range electric vehicle. Nissan will launch its Leaf all-electric car. Buyers of the new models will receive a $7,500 federal tax credit, but demand is uncertain.

"Instead of plucking numbers out of the air, we should base policy on science and expert reviews of factors like affordability of technology, availability of low-carbon fuels and the state of the electric infrastructure," said David McCurdy, AAM president and a former Democratic congressman from Oklahoma.

Read more: Fuel goals strain carmakers | freep.com | Detroit Free Press http://www.freep.com/article/20100929/BUSINESS01/9290326/1331/BUSINESS01/Fuel-goals-strain-carmakers#ixzz10vHFDOSW

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