• by Karl Greenberg , December 6, 2007

For the first time since 1975, Congress has agreed to a major change to corporate average fuel economy (CAFE) legislation. The new standard upon which both houses have agreed to is a 40% increase in new-vehicle fuel economy, to 35 miles per gallon for cars and trucks by 2020. The current standard is 27.5 mpg for cars and 22.2 for trucks.

"This landmark energy legislation will offer the automobile industry the certainty it needs, while offering flexibility to automakers and ensuring we keep American manufacturing jobs and continued domestic production of smaller vehicles," U.S. Rep. and House Speaker Nancy Pelosi, D-Calif., said on her Web site.

There was little immediate reaction from automakers, with only Toyota saying it supports the new rules. The Big Three have resisted revision of CAFE legislation in the past, saying that compelling conformity to the standard will force them to pass on costs.

Josephine S. Cooper, Group vice president/Toyota Motor North America, said in a statement that the company supports passage of the legislation by year's end. "Toyota applauds the congressional leadership for reaching agreement and taking this very important step toward establishing new, aggressive nationwide fuel economy standards."

The energy bill, of which the new CAFE standard is a part, establishes a plug-in hybrid/electric vehicle tax credit for individuals and encourages the domestic development and production of advanced technology vehicles and plug-in hybrid vehicles.

General Motors and Ford have both been promoting such vehicles, at least as concepts. GM, which has been showing its Chevrolet Volt concept at shows and events this summer, launched a national ad campaign making Chevrolet its fuel-efficiency brand. The effort includes six national TV spots launched during Chevrolet's July sponsorship of the Live Earth concerts.