Saving the Environment or Killing Detroit?

Regardless of whether this is a good or bad move, if California's regulations take effect, roughly 80 percent of the vehicles on the market today could not be sold in the state, according to Harbour.

"The people that live in those states would have their selection of vehicles, that they could buy from the dealer, dramatically reduced," he said.

The automakers would also have to pump billions of dollars -- dollars that they just don't have -- into research, development and new production facilities.

Harbour said a hybrid car today can cost $3,000 to $8,000 extra to produce. Most of that cost can't be passed on to the consumer.

"Fuel economy and emission are an important buying criteria but in this type of economy, people just want the best deal," Harbour said. "In the era of low-cost gas … people make a decision more on what vehicle they want in terms of size and comfort."

Cost of Fuel Efficient Cars

That might not necessarily be the most fuel-efficient car.

Craig Fitzgerald, an auto analyst at Plante & Moran PLLC, said this measure "adds a new layer of cost and complexity to a period when a lot of [manufacturers] are struggling to figure out how they're going to meet current standards."

Fitzgerald said estimates of the new costs are between $50 billion to $100 billion.

He added that these measures would either be "far too rigorous and expensive" or "difficult to logistically manage."

Stephen Spivey, a senior auto industry analyst with Frost & Sullivan, said the significant costs of this new measure should be subsidized.

"There are two questions that we're dealing with," Spivey said. "Can we actually make vehicles that are fuel-efficient and, if we made them, would people buy them?"

The demand for the more fuel-efficient cars has a direct relationship to gas prices, he added.

"Our assumption is that fuel prices are going up, and on that assumption, we believe people will buy the cars," Spivey said.

Fitzgerald said auto industries believe that larger vehicles generate more profit.

"If the vehicle grows in size, it doesn't necessarily grow proportionally in cost," Fitzgerald said. "A bigger vehicle adds more convenience and options that improve the profitability of the vehicle. Conversely, if you shrink the vehicle, you're taking options and profits out."

The new standards will require industries to move toward these smaller models, which Fitzgerald said will shrink both the market and profits.

"It will require massive changes in vehicles," Fitzgerald said. "It will take tens of billions of dollars that [automakers] don't have right now."

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