• by Karl Greenberg , July 18, 2007

With Congress set to vote next week on strict fuel-efficiency standards passed by a Senate panel this spring, the National Automobile Dealers Association (NADA) is pressing Congress this week to kill the Senate's proposed fuel-economy.

Congress will vote on whether to raise the Corporate Average Fuel Economy (CAFE) standard, requiring average fuel economy for all passenger vehicles to reach 35 miles per gallon by 2020, with 4% improvements each year after that until 2030.

NADA is instead urging representatives to back H.R. 2927--introduced on June 28 by Rep. Baron Hill (D-Ind.) and co-sponsored by Rep. Lee Terry (R-Neb.)--who are advocating a 30 to 40% improvement in CAFE over the next 15 years, amounting to 32 to 35 mpg CAFE by model-year 2022.

Its argument is that consumers won't buy vehicles that get 35 mpg, and will instead opt to keep their current cars and trucks, defeating the purpose of the mandate.

Dale Willey, NADA chair, said in a release: "There's a fine line between mandating more fuel economy and meeting consumer needs. Just because Congress sets an unreasonable CAFE standard that doesn't mean that consumers will buy these vehicles. If they can't get the vehicle that meets their needs, they'll keep the ones they have, and that would defeat the goal of increasing fuel economy."

NADA's argument is that, to meet those requirements, automakers will have to make smaller, less powerful vehicles that carry less cargo, fewer people and compromise safety. And that they will have to raise prices to pay for fuel economy technology, adding between $2,000 and $5,000 per vehicle.

NADA says in a release yesterday that the Hill-Terry option permits different standards for cars, trucks and SUVs, "protecting the diversity in vehicles that American consumers demand," and that "the measure gives automakers enough lead-time to develop the technology needed to meet the new standards."

A fight is likely since Sen. Carl Levin (D-Mich.) reportedly says he'll filibuster the vote; Sens. Ted Stevens (R-Alaska) and Trent Lott (R-Mo.) are likely to oppose, and Sen. Bill Nelson (D-Fla.) reportedly will argue for a 40 mpg CAFE, with Sen. John Kerry (D-Mass.) arguing for 31 mpg by 2015 and 35 by 2020.