Could Meeting U.S. Fuel Economy Targets Be 40% Cheaper than Estimated?

A new report claims the cost of meeting Obama-era fuel economy standards for 2025 could be 34%-40% lower than estimated just two months ago.

The current standard would require average fuel economy greater than 50 mpg by 2025. The Environmental Protection Agency estimated in early January it would cost an average $875 per car between 2021 and 2025 to reach that level.

But a white paper by the U.S.-based International Council on Clean Transportation puts the price at $551 per vehicle. The group says previous estimates ignore the continuing decline in the cost of advanced fuel-efficiency technologies and the price of electric cars. ICCT also asserts that the same trend would make it feasible for fuel economy standards to continue to rise by 4%-6% per year through 2030.

The group points out that EPA’s stated fuel economy targets vary significantly from real-world averages that appear on new-car sales stickers. ICCT estimates that the agency’s current standards would raise the latter figures from 26 mpg in 2016 to 35 mpg in 2025 and, if extended, to at least 42 mpg by 2030.

The independent nonprofit describes itself as a source of “first-rate, unbiased” research. The group is best-known for commissioning the research that in 2015 revealed Volkswagen AG’s diesel emission cheating.

EPA declared its 2025 fuel economy target “feasible and practical” in an accelerated assessment completed days before Donald Trump began his presidency. Last week Trump announced that EPA, an agency he described during his campaign as “out of control,” will reopen and review that decision over the next 12 months.