In a time of sky-high gasoline prices, some Americans are trying to save money by seeking out cars that get better fuel efficiency. We don’t blame them.
But the federal government is considering slapping such high gas mileage standards on cars over the next several years that it may put the price of new cars out of reach for millions of our people.
The Detroit News reported recently that higher fuel efficiency requirements under consideration in Washington could raise car prices by almost $10,000, slash auto sales by 5.5 million per year and destroy 260,000 jobs! The newspaper based those numbers on a study by the Center for Automotive Research, based in Ann Arbor, Mich.
Federal regulators may impose, by 2025, fuel efficiency standards of somewhere between 47 and 62 miles per gallon. If the higher end of that range, 62 mpg, were imposed, a new car could cost an additional $10,000, the Center for Automotive Research estimated. Even if the lower figure, 47 mpg, were imposed, it would cost an additional $3,700 per car.
It’s a struggle for many people to purchase a new car already. So it’s no wonder that the Center for Automotive Research estimates that 5.5 million fewer people would buy new cars if a “surcharge” of $10,000 were added to the sticker price. That does not bode well for our already-troubled auto industry and the people it employs.
Environmental activists and the federal government are criticizing those estimates, saying the real cost of making automobiles vastly more fuel efficient would be “only” $800 to $3,500 per car.
But suppose their lower estimates are more accurate. Don’t they realize that those “not-quite-so-huge” price increases would also discourage the purchase of new cars substantially? Do they believe that every potential new-car buyer just happens to have an extra $800 to $3,500 “lying around”?
And how are automakers going to reach the higher fuel efficiency standards in the first place? Those requirements are likely to force carmakers to build smaller, lighter cars, which are often less safe. As a result, you could wind up paying a higher price for a vehicle that is more dangerous. Does that sound like a bargain to you?
Higher fuel efficiency of our nation’s cars is clearly desirable, but it should be driven by consumer demand. It should not be imposed artificially by Washington without regard for the serious unintended consequences.