Producing more fuel-efficient automobiles: a costly proposition

Technical Report · Tue Jan 19 04:00:00 EST 1982

OSTI ID:5332101

Bowsher, C A

Legislation establishing federal fuel economy standards for automobiles required the auto industry to produce new-car fleets that averaged 18 miles per gallon starting with model year 1978, increasing to 27.5 miles per gallon by 1985. Industry expects to spend about $70 billion (in constant 1980 dollars) on buildings, property, equipment, and retooling over the next several years to produce new, small, fuel-efficient autos that will compete with foreign imports. Comparable expenditures for the pre-fuel economy period of 1970 to 1974 were $35 billion, and in the initial fuel economy period of 1975 to 1979, they were $41 billion. The industry expects that it will attain fleet averages of about 31 miles per gallon by 1985. Market demand for more fuel-efficient cars coupled with foreign competition will probably lead the auto industry to keep on producing fuel-efficient automobiles for the future. Although existing technologies can approach a fleet average of 40 miles per gallon and beyond, the major uncertainty concerning the production of such automobiles appears to be the risk of financing the large capital investments needed.

• Research Organization: General Accounting Office, Washington, DC (USA)
• OSTI ID: 5332101
• Report Number(s): CED-82-14; ON: DE82903985
• Country of Publication: United States
• Language: English

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