The auto industry is united in its support of one national fuel economy standard to regulate vehicle emissions. In 2004, the California Air Resources Board passed strict greenhouse gas emission standards and subsequently requested a waiver from the Environmental Protection Agency (EPA) to implement their regulations. Such a request can be granted under the Clean Air Act as long as the state meets the "compelling and extraordinary conditions" standard.
After much debate in December of 2007, President George W. Bush signed the Energy Independence and Security Act (EISA), which aimed to improve vehicle fuel economy, and fortifies the Corporate Average Fuel Economy (CAFE) program's preemption of state regulations. The Act set a goal for the national fuel economy standard of 35 miles per gallon by 2020, a 40 percent increase over 2007 standards. EISA also requires an increase in the standard with each model year using an attribute based system.
Following enactment of EISA, in February of 2008, the EPA denied California's waiver request. After his inauguration, President Barack Obama instructed his Administration, the EPA, and the National Highway Traffic Safety Administration (NHTSA) to review all available information to readdress the fuel economy issue.
In May of 2010, AIADA supported the historic joint rule making proposal between the National Highway Transportation Safety Agency (NHTSA) and the EPA that was announced by President Obama. Bringing together the two federal agencies, along with automakers and governors from across the country, the President outlined a national program to reduce greenhouse gas emissions and significantly improve fuel economy in automobiles. AIADA and its dealer members have long recognized the need for a single, national fuel economy standard. The new standards were offered in September of 2009 and would require an average fuel economy of 35.5 miles per gallon in the year 2016.
On July 29, 2011, EPA, NHTSA, and California committed to the continuation of a single national program for model year 2017-2025 vehicles with an aggressive fleet-wide standard of 54.5 miles per gallon by 2025. During the negotiations with NHTSA and the EPA, the auto industry was able to achieve a mid-term report to determine how well the rules are working.
A study conducted by the National Automobile Dealers Association revealed the standard of 54.5 miles per gallon by 2025 CAFE standards could add as much as $3,000 to the price of a new vehicle. This increase in cost will stem from the advancements in technology and the cost to build the vehicle to meet these latest standards.