Government sets strict fuel-economy goal of 54.5 by 2025

— -- Strict new federal fuel-economy and carbon-emission standards made final Tuesday are the biggest technological challenge to the auto industry since the government began regulating emissions in 1970 and mileage in 1975.

The rule sets the equivalent of 54.5 miles per gallon as the average the auto industry must achieve by 2025, up from 29.7 mpg now and 35.5 mpg in 2016.

The tough "CAFE" standard (for corporate average fuel economy), which was to be announced earlier this month, was announced Tuesday by the Obama administration on the day that Republicans' national convention got underway in Tampa.

It is "a monumental day for the American people," Transportation Secretary Ray LaHood said in announcing the final rules.

And it's the script for a likewise monumental change in the cars and trucks Americans drive. The vehicles will undergo more urgent evolution of current trends so that, in a decade or so, the American streetscape could resemble science fiction, including:

•More gas-electric hybrids and plug-in hybrids. More electric cars. A few that run on natural gas. Maybe a few more hydrogen-fueled cars.

•Smaller cars powered by smaller gasoline engines, most using turbochargers to get back the power they lose as they give up size.

•Dashboards that resemble video games, giving you colorful "atta-boys" when you drive with a light foot.

•More parts made from composites and high-price aluminum, titanium and high-strength steel — metals which have the additional hidden cost of wearing out fabrication equipment in auto assembly plants faster than conventional steel.

•Oval car bodies to slice the air. Sophisticated, many-speed transmissions and CVTs (continuously variable automatic transmissions) that can keep the engines running in their sweet spots where they make the most power on the least fuel.

Will car buyers embrace the new vehicles? "The risk is pushing technological demands beyond the automakers' ability to deliver. The smarter way to approach it is to let the market guide vehicle fuel-efficiency standards," says Jeremy Anwyl, vice chairman at auto-shopping site Edmunds.com.

"Consumers have shown a willingness to buy fuel-efficient cars," he says, "but not at the expense of other features on their checklists like comfort, space and performance. CAFE risks requiring automakers to build vehicles and adopt technologies that consumers may not want to buy."

Price and payback

And then there is the question of price. LaHood said that all the higher tech needed to meet the target will make a car $1,800 more expensive in 2025 than it otherwise would be. But its fuel-sipping ways should save $8,000 over the lifetime of the vehicle, he said.

The National Automobile Dealers Association (NADA) said it used the government's own figures to calculate a price increase of $3,000 per car, and noted that a vehicle's lifetime is more than 200,000 miles, meaning the fuel-cost savings won't likely all go to the person who paid the higher sticker price for the new car or truck.

The Natural Resources Defense Council, an environmental advocacy group, applauded the final rules.

"We're very happy. This is a good rule, a strong rule. This is the biggest step this country's taken to reduce pollution and our dependence on oil since the original 1970s" federal regulations, says Roland Hwang, NRDC's transportation director.

The rules derive from the Environmental Protection Agency's regulation of pollution. The 1970 Clean Air Act was intended to cut pollution from cars, factories and other sources. A Supreme Court decision since has categorized carbon emissions, which are blamed for global warming, as a pollutant, requiring the EPA to regulate them.

The carbon dioxide that comes out of a car's exhaust is directly linked to the amount of fuel it burns, so the new regs set 163 grams of carbon emissions per mile as the target, and that converts to 54.5 mpg.

The 1975 Energy Policy Conservation Act, passed in reaction to U.S. gasoline shortages during the 1973 Arab oil embargo, meanwhile set the first miles per gallon rule and aimed to double fuel economy at the time. The latest standards now also are touted as enforcing a doubling of mileage.

Bob King, president of the United Auto Workers union, also applauded the rule, saying, "These new standards will help propel the auto industry forward by giving American families long-term relief from volatile fuel prices. Lowering the total cost of driving will make automobiles more affordable and expand the market for new vehicles."

NADA said the opposite, that higher prices would slice 7 million buyers from the new car market.

USA TODAY poll results have indicated that high fuel prices alone aren't enough to get Americans to shift to more fuel-efficient ways.

A poll taken mid-March 2011 — when regular-grade gasoline averaged $3.97 across the U.S., near that year's peak of $3.99 and higher than the current average of about $3.76 — found just 32% of Americans saying that they'd switch to a more fuel-efficient car if gas hit $5. (The record national average to date is $4.11, set in July 2008.)

Another 13% said they wouldn't make the move unless fuel was $6 to $7.99. And a surprising 38% said they wouldn't trade for gas-sippers no matter how high fuel prices rose.

Even so, LaHood insisted on Tuesday that such fuel-stingy cars are "wildly popular."

Your mileage may vary

One thing that is not debated, however: You won't see 54.5 mpg on the window stickers of those 2025-model cars and trucks.

That's because the CAFE standards are set using laboratory tests for combined city and highway driving.

But the EPA window-sticker mileage rating is calculated from those results using a formula that tries to make the sticker number match likely real-world results — about 20% lower than lab results.

Automakers also can earn credits in other ways toward their 54.5 mpg requirement.

The goal is first reduced by as much as 5 mpg for automakers who can maximize credits for using more-efficient air conditioning but also for using more environmentally benign air conditioning coolant, Hwang says.

So the actual CAFE mpg number thus could be down to 49.5 mpg or so, and the window-sticker adjustment formula would slice that further to a window-sticker rating for combined city/highway driving of 39 or 40 mpg.

Some hybrids already meet that, and diesels come close. Many more gasoline cars are in the low- to mid-30s. And the handful of electric cars on the market have mpg-equivalent ratings of twice the new CAFE standard.

The trick, though, will be following the path in the complex new rule's compliance formulas. Not every single vehicle must hit 54.5 mpg. Instead, the rule calls for cars to get 5% better each year, and trucks must go up 3.5%, then accelerate the improvement so that in 2025, everything's closing in on the 54.5 mpg number.

Trucks get an early break

Environmental Protection Agency Administrator Lisa Jackson said trucks get a break initially because they often are work or tow vehicles that need bigger, more fuel-thirsty engines and will be harder to turn into high-mpg vehicles. "Cars are ramping down faster than trucks, and they catch each other at the end," she said.

Automakers, through their lobby group Alliance of Automobile Manufacturers, had signed on to back the new regulation, and said Tuesday: "After years of billion-dollar investments by automakers, consumers have a lot of choice in fuel-efficient cars and light trucks, and automakers are working to sell these high-mileage vehicles in high volumes."

The Alliance statement added, "Compliance with higher fuel-economy standards is based on sales," drawing a distinction between what buyers will accept and what automakers might be forced to build to meet the tighter regulations.

The final rule directs the government to review progress in five years. It then could revise the regulations, if necessary. "Automakers will be looking for a rigorous midterm review with periodic check-ins since it is difficult to predict three years in advance, let alone 13 years," the Alliance said.

In another "extra credit" feature of the rule, vehicles that burn natural gas or are powered by electricity are counted more heavily in calculating compliance with the rule than are conventional gasoline-powered vehicles that hit the targets.

Diesels, though more fuel-efficient by nature, however, get no extra credit in the regs. Alliance members VW and Mercedes-Benz, both backers of diesel power, have objected to the rule for that reason.

If there's any magic in the new regs, it's the coalition of usually contentious factions that stayed together long enough to get the rule approved.

Key player was California, which can invoke its own carbon-emission standards under some circumstances. But on this go-round, California said it wouldn't do that, in order to give the automakers the single, nationwide mpg standard the makers said was necessary for their planning and engineering.

Some are already there, or nearly

Mileage numbers for the federal fuel-economy regulations and for new vehicle window stickers are not the same. Compliance with the new 54.5 mpg federal rule will be based on lab tests measuring combined city/highway fuel consumption.

That works out to 39 to 40 mpg for a window sticker combined number, which is calculated from the lab results to reflect real-world conditions.

The handful of electric cars on sale already are well beyond the rule. A VW Passat diesel comes pretty close at 35 mpg.

And a number of gasoline-electric hybrids already exceed the window-sticker combined ratings needed to meet the 2025 standard. They include:

Ford Fusion hybrid, 39 mpg; Toyota Camry hybrid, 41 mpg; Honda Insight, 42 mpg; Lexus CT 200h, 42 mpg; Honda Civic hybrid, 44 mpg; Ford C-Max, 47 mpg; Toyota Prius c and Prius hatchback, 50 mpg.