Once again, the Corporate Average Fuel Economy (CAFE) standards has peaked its head into the American automotive industry as It was once imposed by Washington D.C. on American automotive companies back in 1975. President Obama's revised CAFE standards are now furthering our foreign competitor’s regulatory and financial advantage by creating higher fuel efficiency requirements and lower emission requirements for new cars.

The new CAFE standards will further frustrate the American automaker - American car buyer relationship to a point where buyers will be priced out of the new car market due to the costs associated with regulatory compliance.

o Even the Environmental Protection Agency [1] (EPA) projects increased costs of $2,100 to $2,500 per vehicle by 2025 in addition to the $950 per vehicle increase associated with the model years 2012-2016 standards.

o More likely, new standards will increase the cost per vehicle by $5720 to $6714 by 2025.

o Even with the savings pocketed from increased efficiency, the 56 mpg standard would result in a net monetary loss for consumers - sticker price increase minus fuel savings - of $2,858 over five years for car owners.

o The US Energy Information Administration’s (EIA) 2011 Annual Energy Outlook [2] finds that no new cars under $15,000 would be available to car buyers in 2025.

The proposed fuel efficiency and emissions standards will expand the main cause of federal spending and debt - a government that is doing too much.

o Congress deemed the National Highway Transportation Safety Administration to be the only agency setting fuel efficiency standards; however EPA’s Supplemental Notice of Intent [3] (SNI) indicates it is now the leading agency in establishing fuel efficiency standards.

o The EPA’s SNI states that the new standards will require new programs to encourage the adoption of the technology needed to implement the new standards.

Click Here to read more of Americans for Tax Reform’s take on Obama’s automotive regulatory initiative.