US Secretary of Transportation Pete Buttigieg unveiled stricter fuel economy standards today that he says would save Americans money at the pump, while helping reduce carbon emissions and fight climate change.
“When these standards go into effect, Americans buying a new vehicle will be spending less gas than they would have if we hadn’t taken this step,” Buttigieg said at a press conference on Friday at Washington, DC. “We estimate that today’s rule will prevent 5.5 trillion pounds of carbon dioxide from entering our atmosphere by 2050.”
By 2026, the average new vehicle in the United States will travel 49 miles per gasoline gallon (mpg) under revised corporate average fuel economy standards, Buttigieg said. The new standards will increase fuel efficiency by 8% per year for the 2024-2025 model years and 10% per year for the 2026 model year. They will also increase the estimated fleet-wide average by nearly 10 miles per gallon for the 2026 model year, compared to the 2021 model year.
“That means if you fill up four times a month, it would become three times a month by the 2026 model year based on those averages,” Buttigieg said. “And, of course, that would save a typical American household hundreds of dollars.”
The new standards, which were first unveiled last year, are part of a broader effort by President Joe Biden to reverse the rules put in place by Donald Trump and return to the fuel economy standards of the Obama era of nearly a decade ago.
Last August, the National Highway Traffic Safety Administration proposed new standards this would increase fuel efficiency by 8% per year for vehicle model years 2024-2026 and increase the estimated fleet-wide average by 12 miles per gallon for model year 2026, compared to the year 2021 model. Under the new rules, car owners are expected to save $140 billion in fuel savings for new vehicles sold by 2030 and $470 billion by mid-century.
The Environmental Protection Agency, in a set of parallel rules, said passenger vehicles should average 55 miles of travel per gasoline gallon (mpg) by 2026 – slightly above Obama’s target of 54 mpg but a significant increase from to the 38 mpg rule put in place by Trump. The EPA estimated that the new standard would prevent the release of 3.1 billion tons of carbon dioxide through 2050 and save car owners $420 billion in fuel costs.
Buttigieg also called on Congress to pass Biden’s Build Back Better package, which would enact a list of environmental initiatives, including tax cuts for new electric vehicle purchases. “That would take, for example, the American-made electric pickup trucks that we saw a lot of ads for during the Super Bowl, around $40,000 through the 1920s,” he said. “We could do that with a policy available now.”
The need for new tax credits for electric vehicles speaks to the problem with cars on American roads today, which is that many of them are old. There are approximately 280 million cars and trucks on the road in the United States today, only 3% of which are electric.
Americans typically buy 16 to 17 million cars each year, which means it would take about 16 years of electric vehicle sales alone to completely replace all gas-powered cars on the road today. Additionally, we would need a total ban on the sale and use of gas-powered cars, and so far the Biden administration seems unwilling to do so.
Last year, Biden signed an executive order directing the federal government to spend billions of dollars to buy electric vehicles, retrofit federal buildings, and leverage the power of government to switch to cleaner forms of electricity. And just this week, Biden invoked the Defense Production Act to accelerate the extraction and processing of key minerals used in batteries for renewable energy and electric vehicles.
The rules would also keep in place the so-called “escape from light trucks”, in which larger and heavier vehicles, such as SUVs and pickup trucks, are allowed to pollute more than smaller vehicles. The US auto industry has essentially moved away from producing small vehicles and sedans in favor of large trucks and SUVs, which have higher margins and are more profitable for automakers. (An NHTSA spokesperson did not immediately respond to a question about the light truck loophole.)