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Fuel efficiency: US and car makers agree to new standard

Filed Under: Business, Green and Eco, News, Politics

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Major carmakers have agreed new fuel efficiency standards proposed by the Obama administration in an effort to end the dominance of gas guzzlers.

They have agreed that by 2025, cars and light trucks sold in the US will drive on average 54.5 miles per gallon (mpg) of fuel, compared with 27 mpg today.

The White House said the measures would reduce imports of foreign oil and consumers’ petrol costs.

Environmental groups said the deal would reduce air pollution.

President Barack Obama was joined by carmaker executives as he made the announcement in Washington on Friday.

He said it would lower the country’s oil use by 2.2m barrels a day over the next 15 years and save US consumers almost $2tn (£1.2tn) in fuel costs.

“This agreement on fuel standards represents the single most important step we’ve ever taken as a nation to reduce our dependence on foreign oil,” Mr Obama said.

By the time the standards take effect, the government expects gas-electric hybrids to make up about half of new vehicles.

It comes two years after Mr Obama arranged an $80bn bailout of the US car industry.

With the industry in the doldrums amid the economic downturn and fierce competition from foreign automakers in 2009, Mr Obama helped shepherd a taxpayer-financed bankruptcy reorganisation of General Motors and Chrysler, two major US carmakers.

That left them without the political capital to oppose Mr Obama’s proposed fuel efficiency regulations, analysts said.

Read the full story on the BBC’s website