New, aggressive mpg standards set Aug. 28 by the Obama administration could mean the end of gas-guzzling V8s and SUVs. So reported Brent Snavely for the Detroit Free Press.
Most automakers that do business in the U.S. have signed on to the new 54.5 mpg fleet average. According to government officials, the requirement will spur innovation and possibly create 30,000 jobs by 2025. However, the industry must spend up to $135 billion to get to that point.
“We are struggling with some big choices we need to make,” said Sergio Marchionne, Chrysler and Fiat CEO.
Marchionne said automakers must deploy significantly new technologies and change the way cars are designed. Chrysler will still be able to build vehicles like minivans and Ram trucks, but cars with supercharged Hemi V8 engines will become “rare as white flies.”
Ten out of the 12 automotive manufacturers the Alliance represents, including General Motors, Ford and Chrysler, support the new standards. Volkswagen and Mercedes-Benz, which have invested more in diesels than hybrids, are opposed.
The National Automobile Dealers association warned that the cost to develop new technology could force automakers to charge nearly $3,000 more per vehicle by 2025. But U.S. Transportation Secretary Ray La Hood said the savings by American consumers over the life of new cars will make up cost increases.
“Everyone wins when we reduce fuel use and carbon emissions,” La Hood said.