White House considers big boost to auto fuel economy

The Obama administration is telling American automakers that it would like cars and light trucks to average 56.2 miles per gallon by 2025, a boost to fuel economy that would save consumers money at the pump and help with global warming but drive up the cost of automobiles.

Administration officials floated the number at separate meetings last week with the Detroit Three - General Motors, Ford and Chrysler - according to people in government and industry familiar with the discussions.

They spoke on condition of anonymity because they were not authorised to talk publicly about them.

While it is just a starting point, the figure is the first hint of where the government may be headed as it works to set a 2017-2025 fuel economy standard. Last fall, the US Transportation Department and the Environmental Protection Agency said they would consider a federal standard somewhere between 47 and 62 mpg.

The technology needed to achieve a 56 mpg standard, according to administration estimates, would add US$2,100 to US$2,600 to the price of a car.

The Obama administration is hoping to find some common ground and reach a deal before it makes a formal proposal in September.

"We continue to work closely with a broad range of stakeholders to develop an important standard that will save families money and keep the jobs of the future here," White House spokesman Clark Stevens said in a statement.

"A final decision has not been made, and as we have made clear we plan to propose a standard in September."

The goal of 56.2 mpg is tough, but General Motors will figure out a way to reach it, said Mark Reuss, the company's North American president. He would not say what technologies GM would use to reach the target, but he conceded that many easier, less-costly solutions already are under way or have been done, such as switching to smaller engines and developing more fuel-efficient transmissions.

"When you put those things in for the first time, they may be more expensive," he said. "But this is a volume and scale industry. What was very expensive in the past is no longer very expensive."

Ford Motor Company in a written statement, said discussions with the administration are ongoing, but that it "supports increasing fuel economy requirements with one national programme that is data driven and factors in the impact ... on jobs, the economy, consumers and safety."

Technology already is available for some cars to reach beyond the 56.2 mpg threshold.

The EPA has determined that General Motors' Chevrolet Volt electric car will get 93 mpg in combined city and highway driving.

The Nissan Leaf electric car gets the equivalent of 106 mpg in city driving and 92 mpg on the highway.

But electric motors and batteries aren't quite ready to power larger vehicles such as pickup trucks, creating a challenge for Detroit automakers who get a significant portion of their profits from larger vehicles.

- AP