Car dealers fear Obama fuel standards will make new vehicles unaffordable

The White House is expected to OK federal standards in the next few weeks that will nearly double vehicle gas mileage for vehicles by 2025, as automotive dealers warn the changes could slam the recovering retail car industry because they will come with sticker prices that will keep buyers off their lots.

The recommendations call for “fleet wide” gas mileage of 54.4 miles a gallon by 2025 -- essentially the average gas mileage for cars, trucks, vans and all other vehicles in a model year.

The Environmental Protection Agency and National Highway Traffic Safety Administration submitted their proposed 2017-2025 fuel-efficiency recommendations in mid-July to the administration’s Office of Management and Budget.

“Dealers support fuel economy increases,” Bailey Wood, a National Automobile Dealers Association spokesman told Saturday. “But if dealers cannot put vehicles on the road, we cannot reduce greenhouse gases or our dependence of foreign oil.”

He confirmed a final decision could be issued as early as August 15.

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If approved, the changes are projected to save average American motorists roughly $8,200 at the pump over the life of their vehicles, but would also cost them as much as $3,000 more for a new vehicle.

One major concern is whether buyers will be able to get a loan, which critics of the proposal say would hurt Detroit automakers, including Chrysler and General Motors, who needed billions in taxpayer-funded bailouts during the recession to stave off bankruptcy.

Another concern is the Obama administration’s plan -- which includes more hybrid and electric cars -- will not achieve its goal of “getting gas-guzzlers off the road” because motorists will keep their existing cars or be forced to buy less-fuel-efficient used ones, Wood said.

The recommendations have the support of the Detroit's Big Three, which also includes Ford, and roughly 10 other major automakers, despite them costing the industry a reported $157.3 billion.

Another concern is that better fuel efficiency will result in less gas buying and, consequently, $57 billion less in federal gas-tax revenue through 2025, according to a May 2 report by the Congressional Budget Office.

The nonpartisan office also proposed several options including an increase to the 18.4-cents-a-gallon gas tax or cutting funding to mass transit and road repairs, for which the taxes help pay.

“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,” the president said in July 2011 when announcing the proposed changes. “Using less oil also means our cars will produce fewer emissions.  So when your kids are biking around the neighborhood, they’ll be breathing less pollution and fewer toxins.”

GOP presidential candidate Mitt Romney has said that, if elected, he would look for a better way to improve fuel economy than changing corporate average fuel efficiency, or CAFE, mileage requirements.

"The best approach is to try and build vehicles that people want, rather than having the government telling the companies what they must make," he told The Detroit News in June.

"I would work with the manufacturers to find ways to encourage fuel economy on the part of the consumer. But trying to have the manufacturer push the product on the consumer — that the consumer doesn't want — is not the right approach."