Is the global economic system poised for collapse? Are interest rates and inflation about to annihilate your income and savings? Less dramatically, are new fuel-efficiency standards going to reshape the American vehicle fleet?
The Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) intend to announce the new regulations by the end of September, and the four scenarios currently being discussed range from yearly increases in mandated fuel economy of between 3 and 6 percent. This past weekend, the government told automakers that it is leaning towards a 5 percent increase, which would mean 56 miles per gallon by 2025. But the feds could choose to be even more aggressive; the 6 percent increase translates to a fuel economy standard of 62 mpg.
According to a new study issued by the Center for Automotive Research (CAR), adopting the most stringent fuel economy standard of 62 mpg by 2025 could increase the price of a car by $9790 and cause the loss of 1.7 million jobs. CAR says that the only way to meet such a standard would be to have 64 percent of the U.S. fleet be plug-in electric hybrids (like the Chevy Volt), the most expensive technology. According to the study, today's low-hanging fruit--less expensive high-efficiency gasoline engines and conventional hybrids--would not be sufficient to meet the standard, and the range limits of pure-electric vehicles prevented their inclusion. "There's no other distribution of vehicles that would be practical in the market," CAR president Jay Baron says.
If any of those scenarios seem plausible to you, then you should be borrowing money to buy a new-ish reliable gasoline vehicle. That's what I'm doing.