Comment: Relaxing fuel-effiency won't be much help to consumers
By Liam Denning / Bloomberg Opinion
The Trump administration has hit upon an unorthodox solution to the cost-of-living crisis: Pumping more gasoline. Executives from Ford Motor Co., General Motors Co. and Stellantis NV attended a White House ceremony on Wednesday afternoon to unveil proposed looser fuel economy standards for vehicles; as well they might.
Pitched as help for the beleaguered consumer, the new fuel economy rules are likely to do more for Detroit’s bottom line; in the near term anyway. President Donald Trump claims American families will save $109 billion over the next five years, relative to the more stringent rules set under his predecessor. Meanwhile, vehicles for model year 2031 will apparently be $925 cheaper than otherwise.
Both numbers are problematic. The first is a gross figure before taking account of associated costs, not least higher fuel bills for thirstier vehicles. The net benefit is put at just $24 billion or, using households as a proxy for families, a princely $181 per household spread over five years. The $925 figure, meanwhile, equates to less than 2 percent of today’s average vehicle price. Even assuming it were actually realized, at $3 per gallon it would be eaten up by extra gasoline costs within three years.
Most importantly, however, all these numbers ignore the realities of why vehicle prices are high in the first place and why domestic automakers are more likely to pocket any such benefits.
https://www.heraldnet.com/opinion/comment-relaxing-fuel-effiency-wont-be-much-help-to-consumers/