Recently, consumer demand for fuel efficient cars has increased thanks to rising gas prices. However, a new study conducted by the Center for Automotive Research predicts that if the government requires automakers to produce vehicles with an average fuel economy of 62 mpg by 2025, they could become too expensive to offset the fuel savings.

Cars could cost you less at the pump, but significantly more up front if a 62 mpg standard goes into effect in 2025.

However, that doesn’t mean that there’s no room for improvement. Automotive News reports that, “Raising federal fuel economy standards to as high as 56 mpg in the 2025 model year would yield fuel savings to consumers that more than offset higher vehicle prices. … But lifting corporate average fuel economy to 62 mpg would result in vehicle price increases that exceed fuel savings over a five-year period, according to the nonprofit Center for Automotive Research.”

The study, which was released Tuesday, forcasts that developing and producing cars to meet a fuel economy range between 47 and 62 mpg by 2025 will cost between $3,744 and $9,790 per vehicle – a significant increase from the predicted $770 to $3,500 estimate issued by the Environmental Protection Agency.

Additionally, higher vehicle costs could reduce sales which could result in job cuts. The Detroit News writes, “If each automaker is required to reach a fleetwide average of 62 mpg, and gas costs $3.50 in today's dollars, 5.5 million potential buyers would evaporate from the 2025 car market, the study found; the reduced demand, it said, would cost 260,000 jobs.”

Still, some environmentalists say that by establishing policies gradually, the new standards can be met. Roland Hwang, transportation director for The Natural Resources Defense Council writes, “The best way to make sure that automakers build the efficient car that Americans want—vehicles that frankly should have been rolling off production lines years ago—is to establish and enforce feasible slow-and-steady standards for vehicle pollution and efficiency that deliver 62 mpg by 2025.”

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