Gasoline – Fuel Efficiency

How Future CAFE Standards Could Affect Fleet Purchasing

July 20, 2016, by Paul Clinton

Three federal agencies on Monday dropped the 54.5 mpg corporate fuel economy target for 2025, which would ease the burden on car and truck manufacturers to produce a vehicle mix that reaches that level.

While the 2025 model year may be a long year off, we decided to check with several fleet management companies to get their thoughts on how this decision may affect fleet purchasing a decade from now.

Many models produced by automakers meet today's standards, yet the standards increase in each successive year. A reduced 2025 target could slow fuel economy improvements, said Tim Cengel, manager of manufacturer relations with Wheels, Inc.

Cengel listed five other possible impacts of the move:

  1. Slowing fuel economy gains could reduce the impact of short cycling.
  2. Lower OEM investment in fuel economy technologies could slow year-over-year price increases.
  3. OEMs will continue to develop and sell the larger trucks and vans favored as work tools in commercial uses.
  4. Corporations with green initiatives and sustainability mandates may have less choice of gasoline-electric hybrid and battery-electric models.
  5. OEMs would likely reduce use of more expensive and exotic weight-reduction materials in new models.

While Cengel offered five possible impacts, other fleet management executives said the move would have little effect.

"It is unlikely that this change will impact fleet purchasing decisions, since the burden of compliance was really on the vehicle manufacturers — not fleet," said Paul Fortin, vice president of LeasePlan USA's strategic modeling and analytics research team.

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