(Bloomberg) -- U.S. regulators have underestimated the costand difficulty of achieving their vehicle fuel-economy andgreenhouse-gas targets for 2025 and are giving California too muchpower to shape the country’s policies on those issues, an automakergroup said.

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Even with the current government estimate of $1,800 a vehicle inadded costs, “the payback period for alternative technologiesextends beyond the timeframe most consumers consider; it is likelyto remain that way,” the Alliance ofAutomobile Manufacturers said in a report posted on its websiteMonday. Members of the Washington-based lobbying group includeGeneral Motors Co., Ford Motor Co., Fiat Chrysler Automobiles NV,Toyota Motor Corp. and Volkswagen AG.

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The alliance is seeking to influence the upcoming midtermevaluation by regulators of the 2011 plan by President BarackObama’s administration to boost the fuel economy of cars and lighttrucks by 54% to a projected 54.5 miles (87.7 kilometers) pergallon by 2025 and cut tailpipe carbon dioxide emissions by 35%.The review is meant to consider whether changes are needed in theplan based on actual performance so far.

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The U.S. Environmental Protection Agency, the National Highway TrafficSafety Administration and the California AirResources Board are preparing for the midterm evaluation, withthe three agencies set to issue a draft technical assessment reportlate this month or in early July.

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Nick Conger, an EPA spokesman, didn’t immediately respond to arequest for comment on the alliance report. In December,Christopher Grundler, the EPA director of air quality andtransportation, said in a report that average fuel economy hasimproved by 5 mpg, or 26%, in the last 10 years, more than expectedand that “it’s clear our standards are working.”

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Hybrid estimates


The automaker group said an EPA projection in 2012 that meeting the2025 federal mileage standard would need only 5% of U.S. cars andlight trucks to be hybrids is too low. A recent analysis done forautomaker groups found that as many as 47% of all cars may need tobe as fuel efficient as current hybrids, the alliance said.

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“The actual cost of the program depends on this projectedtechnology mix,” the alliance said.

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Lower gasoline prices affect sales of hybrids and the mix ofcars and light trucks, the automaker group said. Consumers may beopting for gasoline-powered vehicles because reduced fuel priceshave extended how long it would take to recoup the higher costs ofalternatives such as hybrids, the alliance said.

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To meet the targets, automakers will have to boost fuelefficiency by almost 67% in the 13 years ending in 2025, comparedto 23% in the nine years ending in 2014, the alliance said. Thatacceleration may not be realistic, according to the group.

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California effect


The automaker group also cited the impact of Californiarequirements, adopted by nine other states, that by 2025 aprojected 15.4% or more of new-vehicle sales be zero-emissionsmodels, powered by batteries or fuel cells. In addition, whenCalifornia issues its own assessment in November on whether thestate’s CO2 targets for 2022-2025 should be maintained, it will bejumping ahead of the midterm evaluation and exerting adisproportionate impact on the national debate, according to thealliance.

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Ceres, a Boston-based coalition of investors andenvironmentalists, said in a statement Monday that higherfuel-economy targets will protect automakers from future oil priceshocks.

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“U.S. automakers have been caught flat-footed before,’’ saidCarol Lee Rawn, director of the Ceres transportation program.

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The InternationalCouncil on Clean Transportation, a nonprofit advocacy group,said this week that without higher fuel-economy targets in the U.S.and other countries, global oil demand could grow from 94 millionbarrels a day in 2015 to 112 million by 2030. If the U.S. and othercountries maintain the targets, oil demand could level off at 101million barrels a day by 2030, the group said.

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