The Obama administration granted Honda Motor Company a reprieve from the fuel-economy rule proposed in August 2012. Under these new regulations finalized on August 28th, automakers must double their average gas mileage of all the new cars and trucks sold in 2025. Therefore, new vehicles in 2025 must average 54.5 miles per gallon under government regulations, which in actuality means that they will average 40 miles per gallon. Although the cost of a new car will likely increase by $2,800, which many critics say is too high for the average consumer, the higher MPG will save $8,000 in fuel costs over the life of a car. These new regulations are intended to cut greenhouse gas emissions in half (Bloomberg Businessweek). .
The new regulations are formally called the corporate average fuel economy rule, or CAFE. To comply with CAFE, the auto industry will shell out about $136 billion. However, consumers are predicted to save $451 billion in fuel costs, according to the US Environmental Protection Agency and National Highway Traffic Safety Administration. The regulations will be gradually introduced to the industry, with small improvements made each year (Keane). .
When the administration first proposed the new regulations, Honda argued that they discriminated against foreign automakers supplying the US market because it "communicates favoritism and an unfair playing field to all market participants." In the finalized regulations, the administration added extra credits for the sellers of natural gas-powered vehicles. Currently, Honda is the only automaker supplying natural gas-powered vehicles in the US (Keane). .
"Providing incentive credits for natural gas vehicles makes a great deal of sense under this regulation," said Edward Cohen, Honda's vice president of government and industry relations. "A dedicated natural gas vehicle reduces CO2 emissions by 25 percent and petroleum consumption by 100 percent" (Keane).
