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The True Cost of Raising CAFE Standards

Last July, The Obama administration revealed a proposal to raise the Corporate Average Fuel Economy (CAFE) standard to 54.5 mpg by 2025. Initial government-study figures claimed the move would increase the sticker price of the average new vehicle by around $2,000.

However, Don Chalmers, chairman of National Auto Dealers Association (NADA) government-relations committee, announced in a Detroit hearing for the proposal that the move to increase the fuel-economy standards would force manufacturers to use expensive “fuel-saving technologies,” thereby increasing the price by a whopping $5,000 for 2025 models.

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