GM’s bailout and bankruptcy money, which lead to 61% of the company under the ownership of the U.S. government, has lead the automaker to adhere to Obama’s goals for fuel-efficient vehicles. The current Chevy Tahoe and Cadillac Escalade get an average fuel economy of 15 miles per gallon. With the redesigned models in the works, GM will increase the fuel economy of these vehicles to meet new mileage regulations. GM is working at a fast clip in order to gain greater SUV and truck sales. This is necessary in order to raise the initial public offering of stock later this year. The IPO will provide the funds for the beginning stages of reducing the government’s involvement in the company.
Obama’s administration has urged, “Smaller, more efficient engines, and wider use of electric propulsion” (Wall Street Journal). The administration has set different approaches in order to reach their goal for improving fuel economy.
The first method involves increasing fuel efficiency to 47 miles a gallon, which adds as much as $1,050 to the cost of a vehicle. This has the potential to save consumers between $4,900 and $5,200 in fuel costs over the life of a car. Another, and much more aggressive, method would propose that the fuel economy to 62 miles a gallon. By doing so, this would add between $2,800 and $3,500 to the cost of an average vehicle. However, this could save drivers between $5,700 and $7,400 over the life of the car. The government has also said that to achieve this manufacturers would have to increase their sales of gas-electric hybrids to 68% of the market and cut 26% from the weight of the average car.
I endorse this proposal by the Obama administration because it gives automakers a need to create more fuel-efficient vehicles. GM’s concern with the efficiency of their vehicles will also encourage other car companies to follow suit. It also increases the investment that manufacturers make in alternative energy solutions. I’m interested to see how the auto industry looks by 2025, and whether most Americans are either driving hybrid or electric vehicles. If so, the overall economy of the U.S. will change and we will be must less dependent on foreign oil for our energy.
Source: http://online.wsj.com/article/SB10001424052748703859204575525963701140270.html?mod=WSJ_auto_MiddleSecondHighlights
While I don't know if GM should be forced to adhere to these standards, I do think the Obama administration has the right idea to promote more fuel efficient cars. 15mpg is just pitiful for a modern day car. I think we need to increase awareness among the public that buying a car with a high mpg saves them a considerable amount of money in the long run. Convincing people to pay a higher amount for a fuel efficient car may be a tough task. However the concept is just like going to college, you pay a lot upfront, but it pays off in the long run. I'm also curious as to what the road would look like in 2025. I think most if not all cars sold will be hybrids, and electric cars will be becoming more mainstream.
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