Fuel economy standards only help if people can afford the vehicles

By David Tanner, Land Line associate editor | Wednesday, August 29, 2012

With new EPA rules announced Tuesday to require a 54.5 mpg fleet-wide standard for cars by 2025, truckers are bracing for what the next round of mandates for heavy trucks and trailers could look like. Especially concerned are the small operators that say the EPA could soon price vehicles – and vehicle loans – out of reach for their businesses.

The agency’s rules for automobiles and light trucks announced Tuesday by Environmental Protection Agency Administrator Lisa Jackson and U.S. Transportation Secretary Ray LaHood are estimated to add about $1,800 to the price of vehicles during model years 2017-2025. They told the press via teleconference that fuel savings would more than make up for the cost increases, perhaps up to $8,000 over the life of the vehicle.

Not long ago, the EPA added $945 to the sticker price of cars and light trucks in rules that apply to 2012-2016 model years – which means the 2025 standard will cost approximately double what the first rule added.

Truckers have reason to be concerned, then, about what could happen to them, says OOIDA Director of Legislative Affairs Ryan Bowley.

Following the first rule for cars, the EPA and the National Highway Traffic Safety Administration teamed up in 2011 to issue the first ever fuel economy and emission standards for medium- and heavy-duty trucks. That rule, which applies to 2014-2018 model years, was estimated to add $6,200 to the price of a new truck, according to information accompanying the rule.

“It doesn’t bode well for truckers as the EPA works to extend the standards for trucks past model year 2018,” Bowley said.

Consumers have reason to believe the EPA’s cost figures are on the low side as the agency promotes an “everybody wins” scenario.

The National Automobile Dealers Association disputes the EPA’s $1,800 estimate concerning 2017-2025 cars and light trucks, and says the rule announced Tuesday will add $3,000 to the sticker price.

“This increase shuts almost 7 million people out of the new car market entirely and prevents many millions more from being able to afford new vehicles that meet their needs,” NADA Chairman Bill Underriner said in a statement.

Adding to that sentiment, Bowley says small businesses applying for loans for new equipment may not qualify if the vehicles get too expensive.

“They’re pricing people out of the new car market and they’re going to be pricing people out of the heavy truck market,” he said. “We have already seen that with past EPA rules regarding diesel engines.”

So what will the next phase look like as the EPA and NHTSA set their sights on heavy vehicles beyond 2018?

The agencies have already tipped their hand that they will soon begin targeting trailers in addition to the tractors – essentially mandating SmartWay technologies and add-ons.

Trucking businesses and fleets prefer vehicles that meet the needs of their businesses, Bowley says, and the industry is not one-size-fits-all as the EPA rules would suggest.

“The rules force people to purchase trucks that meet EPA standards but do not meet the needs of their businesses,” Bowley said.

While smaller operations have aired their concerns about the EPA rules increasing the price of trucks, the American Trucking Associations has been a cheerleader of the rule changes from day one.


Copyright © OOIDA

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