Tough new economy laws proposed in the US would require new cars to return 74mpg by 2025

US President Barack Obama is being pressured by environmental groups to enact tough new Corporate Average Fuel Economy (CAFE) figures that would require new cars to return 74mpg (62mpg in US conversion) by 2025.

Influential US groups, including the California Air Resources Board, want to see the 74mpg target proposal as law by next year.

The ruling could have a big impact on European premium car makers, who would have to hit the 74mpg as an average across their entire ranges. If the economy target becomes law, virtually every car bigger than a Golf would be a plug-in hybrid or use a range-extender electric drivetrain.

The US government has to propose new CAFE legislation this September for the period between 2017 and 2025. The less onerous proposal on the table would mean improvements in corporate fuel economy of just three per cent per year over the seven-year period, leading to a 56mpg (47mpg US) average.

Some automotive industry experts suggest the 74mpg target would force up the average cost of a car by between $6500 (£4000) and $10,000 (£6200) in today’s money.

As a result, the US-based Alliance of Automobile Manufacturers has claimed that a hike in new car prices would lead to as much as a 25 per cent slump in sales and huge job losses.

Hilton Holloway

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