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USA: Obama 54.5 MPG Rule for Autos Adds Credits for Honda, Tesla

Updates with rule changes, analyst comment starting in second paragraph.)

Aug. 28 (Bloomberg) — President Barack Obama’s administration altered a rule forcing automakers to double average fuel economy by 2025 to include changes that benefit Honda Motor Co. and electric carmaker Tesla Motors Inc.
The rule, first proposed in November 2011, gives automakers extra credit toward meeting the standards by selling alternative-fuel vehicles. Today’s final version gives the same credits to sales of natural gas-powered cars as electric vehicles.
Small companies such as Tesla will be able to opt in to the rules for which they’d otherwise be exempt. That would allow them to sell credits for exceeding the standards to bigger companies that can’t meet their fuel-economy improvement goals.
“By the middle of the next decade, our cars will get nearly 55 miles per gallon, almost double what they get today,” Obama said today in an e-mailed statement after his administration released the final rule. “It’ll strengthen our nation’s energy security, it’s good for middle class families and it will help create an economy built to last.”
The corporate average fuel economy, or CAFE, rules released today and that took effect earlier this year are supposed to reduce U.S. oil consumption by 12 billion barrels and lead to fuel savings of more than $8,000 by 2025 over the life of a vehicle, the White House said. Boosting average fuel economy is part of Obama’s plan to reduce oil imports and use. Promoting purchases of more fuel-efficient vehicles can help reduce the use of fossil fuels.
The fuel standards announced today will add $1,800 to the average cost of vehicles by 2025 and be more than offset by savings in fuel spending, U.S. Environmental Protection Agency Administrator Lisa Jackson said today on a phone call with reporters.

$192 Billion

The EPA and National Highway Traffic Safety Administration released the proposed rule for model years 2017 to 2025 in November after reaching an agreement with automakers on the outline in July 2011. Auto executives from companies including General Motors Co., Ford Motor Co., Chrysler Group LLC and Hyundai Motor Co. stood with Obama at the Washington Convention Center to tout the agreement, which was the basis for the final rule.
The rule calls for increases in fuel economy over time, and the targets in later years of the rule will be difficult for automakers to meet, Jeremy Anwyl, vice chairman of auto- researcher Edmunds.com, said in an interview.

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