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USA: Five Car Makers Back White House’s Tougher Fuel Economy Rules

By SHARON TERLEP And STEPHEN POWER
Five of the largest auto makers in the U.S. have endorsed a proposal by the Obama administration to set tougher fuel economy regulations, after the White House lowered its miles-per-gallon target and built in allowances for the large trucks that drive profits at Detroit car companies, people familiar with the talks said Tuesday.

The administration is proposing auto makers increase corporate average fuel economy to 54.5 miles a gallon by 2025, down from its initial target of 56.2 mpg, people familiar with the matter said. The goal would roughly double requirements from existing levels.

Most of the largest auto makers have signed off on the proposal, people familiar with the matter said. General Motors Co., Ford Motor Co., Chrysler Group LLC, Honda Motor Co. and Hyundai Motor Co. have told the administration they will support the plan. Others are expected to decide Wednesday.

The support likely clears the way for the White House to officially propose the rules by its Sept. 30 goal. It could have moved forward without industry support, but the White House’s goal was to have backing from major auto makers, people familiar with the matter have said.

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Car makers have argued the proposal would effectively require most new vehicles sold in the U.S. to be battery-powered by 2025 and raise prices by thousands of dollars.
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The new proposal calls for a 5% average annual increase in fuel economy for cars and a 3.5% increase for light trucks through 2021. After 2021, both cars and trucks face a 5% annual increase, according to these people.
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