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Study Says Fuel Economy Rules For 2025 Threaten 1.1 Million Jobs In America

Fuel-sipping cars and low gas prices might threaten up to 1.1 million jobs in the USA, concludes a study by the Center for Automotive Research.
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The Potential Effects of the 2017-2025 EPA/NHTSA GHG/Fuel Economy Mandates on the U.S. EconomyThe Potential Effects of the 2017-2025 EPA/NHTSA GHG/Fuel Economy Mandates on the U.S. EconomyThe Potential Effects of the 2017-2025 EPA/NHTSA GHG/Fuel Economy Mandates on the U.S. EconomyThe Potential Effects of the 2017-2025 EPA/NHTSA GHG/Fuel Economy Mandates on the U.S. Economy
The study focused on the potential effects of stricter fuel economy regulations that are planned for 2025 by the EPA and mandated by the U.S. Government in the context of low gas prices in the country. The risk would come if the targets were reached and fuel prices would remain at current levels.

According to the makers of the self-funded study, an organization whose acronym is CAR, which stands for Center for Automotive Research, jobs are at risk because consumers might not be incentivized to buy fuel-efficient cars if gas prices remain as low as they are today.

The group analyzed nine scenarios, and all but one concluded that significant job loss would be the result in the cases they imagined. The sole exception involved the highest projected gas price and the lowest vehicle cost, which brought increased car sales and production, as well as increased employment.

Three less-fortunate scenarios projected a drop in the market that would reduce sales each year in the USA by up to three million vehicles.

Automakers have agreed to double fuel economy standards from 2012 to 2025, but the move would have a projected cost of $200 billion for the industry.

Car buyers would save money on their gas bills because of the resulting fuel savings, which would bring more money into the economy, but low fuel prices might cause those efficient vehicles to fall short of sales expectations.

As Automotive News notes, American car buyers have returned to less fuel-efficient vehicles since 2012, and the trend has manifested itself in 2016.

From January through August 2016, approximately 60 percent of the vehicles purchased in the USA were trucks and sport utility vehicles, which are not known for their fuel efficiency, especially when compared to conventional cars.

While the scenario of stable fuel prices over the next nine years is possibly unrealistic, it could bring significant impediments to automakers in selling fuel-efficient cars, as mandated by the U.S. Government.

If fuel efficient cars did not reach the level of sales projected by the automakers by 2025, numerous people employed by the automotive industry and its connecting branches would risk losing their jobs.

From suppliers and factory workers to car dealers and other businesses depending on the money that the former groups spend, an estimated 1.1 million people could lose their jobs by 2025 if fuel prices remain low.
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 Download: The Potential Effects of the 2017-2025 EPA Fuel Economy Mandates on the U.S. Economy (PDF)

About the author: Sebastian Toma
Sebastian Toma profile photo

Sebastian's love for cars began at a young age. Little did he know that a career would emerge from this passion (and that it would not, sadly, involve being a professional racecar driver). In over fourteen years, he got behind the wheel of several hundred vehicles and in the offices of the most important car publications in his homeland.
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