Speaker 1: There's a new set of corporate average fuel economy regulations coming to town folks, the Biden administration and environmental protection agency this past Friday revealed its new targets through 2026. And there are some big changes that we're going to dive into right now. So what are we talking about? We're talking about cafe that's the C a F E corporate average fuel economy acronym that you probably see pretty often when we're talking about fuel economy regulations, essentially automakers [00:00:30] have to ensure that their average fleet of vehicles that are on sale at dealerships meet these regulations that the government puts in place. Now, the Obama administration per previously had regulations in place through 2025, but last year, the Trump administration put its own regulations in place through 2026. Well, now that Biden is in office, his administration and the EPA released their targets. And we're looking at 52 miles per gallon.
Speaker 1: On average [00:01:00] to 2000, this is a huge increase compared to what the Trump administration called for. They wanted 1.5% increases in fuel economy every single year through 2026, what the Biden administration and the EPA wanna do is a 10% fuel economy jump for the 2023 model year, and then 5% increases year over year. After that, that gets us to the 52 miles per gallon. In 2026, [00:01:30] if the Biden administration meets that it will way overshoot what the Trump administration wanted to do per their goal. They were looking at 43.3 miles per gallon come 2002 26. And like I said, this would get us to 52 miles per gallon, which by the way that even overshoots what the Obama administration wanted to do now, of course, these regulations are about cutting tail pipe emissions and reducing greenhouse gases. But the EPA is also [00:02:00] playing this up that it's going to save motorists at the pump two and a lot of oil right now under the Trump administration regulations, they'd probably cost about 500,000 barrels of extra oil per year, compared to the previous Obama administration regulations.
Speaker 1: Now, if the Biden regulations go through, it could save 290,000 barrels of per year. And if you're driving a more fuel efficient vehicle, it's gonna cost less to fill up at the [00:02:30] pump. And you may go even further on a tank of gas. If it's getting better fuel economy, say 50 miles per gallon, you know, we're talking about on average 52 miles per gallon across an automaker fleet. Now the flip side of this is this fuel saving tech, whatever it may be may increase the price of new vehicles when automakers have to go and engineer new technologies, because it doesn't come for free. Even though the government says they want it, it costs money. And that may increase [00:03:00] the cost of a new vehicle, which I don't know if you guys have noticed new cars are really expensive, like $40,000 expensive. So we might be looking at an even more expensive car as it gets more efficient.
Speaker 1: Now that's not for sure, but that tends to happen when we're looking at new technology, should the regulations become final. There is a public comment period where the public can say what they'd like about these proposed regulations. They could have huge, huge ramifications for the us auto industry. [00:03:30] Not only are we looking at more stringent fuel economy regulations through 2026, the EPA said that these lay the groundwork for even more strict fuel economy regulations in 2027. Now that assumes the same political parties stay in power and a lot can change between now and 2027, but combined with the bipartisan infrastructure bill and more that the Biden administration's trying to do this could set the us auto industry on a are different [00:04:00] course than it was just a couple of years ago.
