On Tuesday, President Obama announced tough new standards designed to force automakers to increase the fuel economy of the cars they make, and decrease the amount of pollution they emit. "The status quo is no longer acceptable," Obama told a press conference this afternoon. "We have done little to increase fuel efficiency of America's cars and trucks for decades."
The move will create a single, national standard that automakers must meet. The fuel economy of all of the vehicles they build must average 35.5 miles per gallon by the year 2016 - an increase from 25 mpg today. The emissions those vehicles produce must also meet certain federal limits. The creation of a single federal standard ends efforts by several states to create their own regulations - and the Obama administration's new rules are tougher than anything most states have considered.
While automakers have opposed similar proposals for years, they are behind this one. The Alliance of Automobile Manufacturers has already issued a statement of support, and media reports indicate that officials from the companies were consulted when developing the new rules. They prefer a single, nationwide standard to a patchwork of state rules, they say.
Administration officials have discussed the nationwide impact of the measures. They estimate that the new rules, for instance, could cut U.S. oil consumption by 1.8 billion barrels, and could lead to a cut in greenhouse gas emissions as dramatic as shutting down nearly 200 coal-fired power plants.
Less widely discussed, however, is the impact of the new regulations on Americans, and on the cars they buy.
What do Obama's new fuel-economy standards mean for you?
No Impact on Current Cars
The new rules don't impact the car you drive. The regulations will apply only to new cars. There is no need to retrofit existing cars in any way to increase their fuel efficiency. The rules also don't affect used cars, so there is no need to worry about your car's fuel economy or emissions when you sell it.
Car Prices Will Go Up...Slightly
The rule will, however, affect the price you pay for your next car. Several media outlets have quoted a "senior administration official" claiming that the new rules will add $600 to the cost of the average car. Other media sources have quoted a figure as high as $1,300, but that figure includes costs to meet rules that were already slated to go into effect before this announcement, so the lower figure may be a more accurate representation of the new rule's impact.
Administration officials, however, say that consumers will quickly recoup that money in savings at the pump. They project that gas will cost an average of $3.50 per gallon by 2016.
It's also fair to ask whether a $600 increase will have much impact. The actual sale price of the average car has dropped dramatically during the current recession, and with the auto industry restructuring, cutting underperforming brands and models, it was difficult to predict the future of car prices even before the rules were announced.
Car Design Will Change (And It's Already Begun)
The rule could also impact the design of your next car. Most manufacturers average 25 mpg across all their models. To reach a figure 10 mpg higher in seven years, automakers will have to alter the way they build cars, bringing more fuel-efficient models to market.
The impact of the new rules on car design, however, is easy to overstate. The process of moving toward more fuel-efficient cars was already underway before the Obama administration announced its new proposal. After a summer that saw gas prices top $4 per gallon, automakers have already invested heavily in developing more fuel-efficient cars.
And while memories of the oil embargo of the 1970s may have Americans envisioning a return to tiny, underpowered cars, that probably isn't how automakers will meet the requirements of 2016.
Instead, they will try to use alternative technologies that enable them to use smaller engines in today's larger cars, with little or no loss in performance.
General Motors, for instance, has invested heavily in the development of the Chevy Volt, a plug-in "extended-range electric" car reportedly capable of travelling 40 miles on electric power alone before igniting a gasoline engine to recharge its batteries - meaning that many Volt owners would use no gasoline in an average day. The Volt is slightly smaller than a Chevy Malibu, but nearly qualifies as a midsize car by today's standards.
And while gasoline engines must build up their power as they accelerate, electric motors are at full power at all times. Vehicles like the Volt may well have acceleration on par with what buyers expect from today's V6-powered cars.
Ford, meanwhile, already sells a hybrid edition of its Fusion midsize car, which gets 41 mpg in combined driving - and reviewers say it outruns four-cylinder versions of the Fusion. Chrysler has several Volt-like extended-range electric vehicles in development.
Larger cars, trucks and SUVs won't drop off the roads, either. Automakers have already focused their energies on making those models more efficient. Ford, for instance, will soon begin replacing large V8 engines with a new, more efficient twin-turbo V6 it calls the EcoBoost engine, which it hopes will offer V8 performance with V6 fuel-economy.
GM, meanwhile, has recently begun offering its Equinox midsize SUV with a new, direct-injection four-cylinder engine that gives it a 32 mpg highway rating and performance most drivers can appreciate. Some of the company's largest SUVs are already available in hybrid form - the Chevrolet Tahoe and Cadillac Escalade, for instance.
The new regulations, then, may simply accelerate a process already underway. More fuel-efficient vehicles were already in development before Obama was even elected President.
One issue, however, remains unclear. Many automakers are currently developing electric vehicles that don't use gasoline at all. It isn't yet clear how the new regulations will affect those vehicles, or the companies that build them.