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USA: Government Pushes Automakers Into High-MPG Lane

Will plug-in electric cars find their outlet? These conservation machines probably won’t soon deliver enough fuel efficiency to pay their price-tag premium vs. regular cars — not even with federal incentives.

Yet from Ford (F) and Toyota (TM) to startups Tesla Motors (TSLA) and Fisker Automotive, firms are speeding along with plug-in rollouts.

One reason is they’ll help big brands meet a government order to drive down average miles per gallon across the fleet of cars they sell.

This Tesla roadster, charging in Portland, Ore., joins plug-in rollouts from Ford, Toyota, Fisker and others. AP View Enlarged Image

“We’re seeing an increase in vehicle electrification; that’s pure-electric vehicles like the Nissan (NSANY) Leaf as well as plug-in hybrids,” said Mike Omotoso, a manager at researcher J.D. Power & Associates. “It’s really the CAFE (corporate average fuel economy) regulations that are driving it, both the midterm 35.5 miles per gallon and longer-term — by 2025 — 54.5 mpg.”

Automakers are doing all sorts of things to improve fuel economy. So over coming years expect to see a blend of more efficient vehicles — conventionally powered, hybrid, all-electric and alternative-fuel.


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