Top car makers say emissions could increase if new rules take effect
BYLINE: Jul 05, 2018 04:37:55Some of the biggest carmakers have been warning that the new emissions regulations introduced by the US Environmental Protection Agency could increase fuel economy and make vehicles more expensive.
In a joint statement, General Motors, Volkswagen, Honda and Ford said their cars could see an average increase of 7.2 cents per kilometre per mile if the new rules took effect in 2020.
Ford, Toyota and Nissan all said they could see fuel efficiency increases of between 2.5 and 6.8 cents per kilometre per year.
However, many automakers, including Ford, are already looking at lower-cost options and have previously said they were unlikely to change their current vehicles.
A new report from car research firm Edmunds says if the regulations take effect in the first quarter of 2021, the average US car could see a fuel economy gain of around 0.3 cent per kilometne per mile.
The report, titled “What’s the cost of a lower-mileage car?”, shows the average cost of the average car in 2025 is $3,945 and the average value per mile is $1,895.
While the cost per kilometer of the lowest-priced car could increase by $1.19 if the rules go into effect, the cost to the average driver could be reduced by $9.80.
The cost per mile could also fall by as much as $1 to $2 if the standards go into force early in 2021.
The price of a standard-size car would drop by $0.34, and the price per kilomete of a vehicle with an average price of $2,500 would fall by $2.40.
But while the average fuel economy gains are expected to be larger in 2025 than in 2020, there is also the possibility that vehicles will get more expensive, the report found.
For example, if the EPA mandates that cars have an average fuel efficiency of 60 per cent, the price of an average car would be $12,890, and for a car with an efficiency of 85 per cent it would be nearly $50,000.
But if the average efficiency for an average American car drops to 30 per cent or less, the car would cost $8,700 more.
While some automakers are still forecasting that their vehicles will not see a significant change, some have already lowered their prices.
Ford said it would reduce the price to $12.99 per mile for a 2017 Ford Fiesta, while VW is considering a price cut of $5.30 per mile to $13.99.
Honda said its 2018 Civic hatchback would be available with an improved fuel economy of between 30 and 45 per cent.
But the automaker has already lowered the fuel economy in 2021 to 40 per cent in all models and the Civic sedan to 34 per cent with the exception of the SE.
Volkswagen said it will drop its 2018 Passat hatchback from $17,695 to $17.395, while Honda will lower the price for its midsize SUV to $20,995, while Toyota is expected to lower its price of its new compact crossover SUV to a new low of $22,495.
Ford has already reduced its 2019 Fusion hatchback to $21,995 for the second year running, while Ford is also considering a $15,500 price cut for the 2018 Focus hatchback.
Volvo is planning to cut its fuel economy by 25 per cent for the new 2019 Golf GTI, and its next-generation compact SUV is expected for an 18-per-cent price cut.
Volker Waas, chief economist at Edmunds, said while the impact of lower fuel economy might not be immediate, it could be a big driver of cost pressures for consumers.
“Fuel economy could be another driver of increased vehicle prices if the fuel efficiency standard is implemented early in the 2020s, and if it doesn’t, that could make it more expensive to buy a vehicle,” Waas said.
“That’s not necessarily good news for consumers, but it could also have some adverse effects for the car industry in the short term.”