Fans of cleaner cars got an early Christmas present this week (or a late Hanukah gift) when the EPA announced on Dec. 20 that it was tightening fuel economy requirements for vehicles starting in the 2023 model year.
The move will require a real-world EPA average of 40 miles per gallon by 2026 and effectively rolls back the Trump administration’s decision in 2020 to loosen fuel economy targets.
(The EPA formally said the standard for 2026 would be 55 miles per gallon, but that it translates into a real-world figure of 40 miles per gallon in stop-and-go traffic. Trump’s mandates had put that real-world number at 32 MPG by 2026, while President Obama’s rules set the number at 36 MPG).
Critics of tougher regulations like these have often cited the higher costs for car companies to build green vehicles, which in turn will be passed down to consumers in the form of higher sticker prices at dealerships.
Yet our research shows that consumers still support higher fuel economy standards.
Prior to the Trump administration’s move in 2020 to roll back the standard to 32 miles per gallon, Autolist.com surveyed current car shoppers about their attitudes towards fuel economy standards and vehicles’ impact on global warming.
The results showed that this latest move by President Joe Biden’s EPA may ultimately end up on the right side of history — and why it may be necessary to truly change consumer behavior.
For starters, consumers were never in favor of the EPA’s 2020 decision to roll back fuel economy standards. Just 29% of respondents in our survey said they supported the Trump administration’s eventual rollback of fuel economy regulations.
People were equally wary of the administration’s move to revoke California’s EPA waiver. This rule allowed the state to set its own regulations for vehicle emissions, a standard that another 13 states and the District of Columbia also follow.
Trump revoked that ability in 2019, though it’s currently in the process of being reversed.
Prior to Trump’s move, just 29% of shoppers in Autolist’s survey agreed with the decision.
Why didn’t people want to roll back fuel economy standards? Because they saw a direct connection between them and global warming, according to our research.
Two-thirds of people in our survey (65%) said they believed that vehicle emissions and fuel economy have an impact on global warming.
That’s a good start, right?
It is until people need to buy their next car and have to put their money where their mouth is.
While two-thirds of people told us vehicles make a difference to the environment, just one-third of consumers (35%) said environmental concerns played any role in the vehicle they actually ended up buying. That includes the vehicle’s size, type (truck, SUV, minivan, sedan, etc), or powertrain (electric vs. gas, etc).
So, many more people believe vehicles are impacting the environment than are willing to change any aspect of the vehicle they buy.
This is where the EPA’s standards could truly move the needle towards cleaner vehicles. If a shopper visits a dealership in 2026 and every vehicle on the lot averages out to 40 MPG, they’re getting their cake and eating it too – going home in a new vehicle that meets their priorities AND which is working harder to reduce greenhouse gas emissions.
As for those higher prices critics of increased regulation cite? Well, they’re already here, unfortunately, albeit for a different reason.
Thanks to supply chain issues (particularly the silicon chip shortage that has rocked the entire auto industry), new car prices are up 25% from this time last year, and used car prices are up 34%, year-over-year.
That means that the average consumer is spending a whopping (and historic) $46,806 on a new vehicle and $30,733 on a used vehicle, according to the latest numbers from CarGurus.
Those numbers will almost certainly level off by 2026 as the current inventory woes work themselves out in 2022 and 2023, but clearly higher prices for vehicles are becoming the rule, not the exception.
See you in 2026.