How Future CAFE Standards Could Affect Fleet Purchasing
Friday, July 29, 2016
In 1975, in a response to the Arab Oil Embargo, Congress enacted the Corporate Average Fuel Economy (CAFE) standards aimed at reducing energy consumption by increasing the fuel efficiency of economy cars and light trucks. The National Highway and Traffic Safety Administration (NHTSA) reviews and adjusts the standards on a regular basis. Recently the NHTSA set standards to increase CAFE levels quickly over the next several years in response to public concern over climate change. Because we will need to import less fuel from other nations, the changes will also improve national security. It’s also hoped that the changes will save businesses and consumers money at the fuel pump.
However, partially in order to ease pressure on car and truck manufacturers, NHTSA has pulled back on corporate fuel economy targets for 2025 by dropping the 54.5 mpg vehicle mix requirement.
2025 may seem like a long time from now, but it’s less than a decade away, which is a timeframe that many fleet managers work within when planning fleet purchases.
A reduced 2025 target will likely have several impacts on the way fleet managers plan for the future and manage their fleet in a decade, including:
· By slowing the fuel economy gains with reduced targets, managers could see a reduction in the impact of short cycling.
· Fewer manufacturers are likely to invest in fuel economy technologies, which could in turn result in a very sudden price increase when a steady year-by-year increase is ignored until 2025 and then dramatically corrected.
· Companies pursuing green initiatives will have fewer choices for highly fuel-efficient, hybrid, and electric vehicles.
We understand the power of planning and are always looking to the future. When you work with Gateway Distribution, you’ll get the very best service, equipment, and facilities. We like to create partnerships that benefit everyone, but especially our clients. Give us a call today to find out how we can help you.