Driving Efficiency: 

Cutting Costs for Families at the Pump and 

Slashing Dependence on Oil
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INTRODUCTION

For decades, politicians of every stripe have been talking about the threats posed by our

dependence on oil – to consumers, our security, and our environment. One of the most 

powerful tools we have to reduce our oil dependence is to increase the efficiency of our cars 

and light trucks, which account for nearly half of U.S. oil consumption. And transportation is 

the second-highest expense for most American households – right after housing. But when 

President Obama took office, the fuel economy standard for passenger cars was the same as it 

had been in 1985.

After decades of inaction in this critical area, President Obama has taken unprecedented steps 

to increase our vehicle efficiency, announcing fuel economy standards that will nearly double 

the efficiency of our fleet. In 2009 the President established aggressive fuel economy standards 

for cars and trucks built in 2011 and announced groundbreaking national fuel efficiency 

standards and greenhouse gas standards for cars and light-duty trucks built in 2012-2016. By 

Model Year 2016, those national standards will raise the average fuel economy of new cars and 

trucks to 35.5 miles per gallon (incorporating efficient gains from air conditioning 

improvements) and lower greenhouse gases emissions to 250 grams per mile (g/mi), while 

maintaining consumer choice. At the same time, the Administration established a harmonized 

program that allows manufacturers to build a single, light-duty national fleet that satisfies all 

federal requirements as well as those of California and other states.

On July 29, 2011, the President announced the next phase in the Administration’s program to 

increase fuel economy and reduce greenhouse gas pollution for all new cars and trucks sold in 

the United States. These new standards will cover cars and light trucks for Model Years 2017-

2025, requiring performance equivalent to 54.5 mpg in 2025 while reducing greenhouse gas 

emissions to 163 grams per mile.

Taken together, the standards established under this Administration span Model Years 2011 to 

2025. They will save American families money at the pump, for a total of $1.7 trillion in fuel 

savings over the life of the program. The standards will cut our oil dependence, reducing oil 

consumption by an estimated 2.2 million barrels a day in 2025 (eventually reaching more than 4 

million barrels a day as the fleet turns over), and saving 12 billion barrels in total over the 

lifetime of the program. And they will clean up our environment, cutting greenhouse gas 

emissions by more than 6 billion metric tons over the life of the program, while reducing 

pollutants like air toxics, cause soot, and smog.

Developed in partnership with auto manufacturers, the State of California, the United Auto 

Workers (UAW), national environmental organizations, and other stakeholders, these 

achievable and cost effective standards will bring the nation over halfway to the President’s 

goal of reducing oil imports by a third by 2025. These standards thus represent a key 

component of the comprehensive energy policy that this Administration has pursued since day 

one, which aims to increase safe and responsible energy production at home while reducing 

our overall dependence on oil with cleaner alternative fuels and greater efficiency.
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BACKGROUND ON FUEL ECONOMY STANDARDS

The transportation sector consumed nearly 5 billion barrels of petroleum in 2009, accounting 

for over 70% of oil consumption in the United States (Chart 1). The lion’s share of that – 45% of 

total consumption – was in passenger cars and light trucks, collectively referred to as “lightduty vehicles.” The sheer size of the light-duty vehicle fleet makes fuel economy standards on 

cars and light trucks one of the most effective ways we can reduce our dependence on oil.

HIGHLIGHTS OF THE OBAMA ADMINISTRATION FUEL ECONOMY STANDARDS 

FOR MY2011-2025

Taken together, the standards established under this Administration span Model Years 2011 to 

2025. They will save consumers money, reduce our dependence on oil, and protect the 

environment. 

Savings at the pump. 

Thanks to the standards, consumers will save an estimated $1.7 trillion dollars in real 

fuel costs over the life of their vehicles.

By 2025, the standards are projected to save families an estimated $8,200 in fuel 

savings over the lifetime of a new vehicle, relative to the Model Year 2010 standard. 

Cutting oil dependence. 

As our cars and trucks become more fuel efficient, we will need to use less oil. Over the 

life of the program, the standards will save an estimated 12 billion barrels of oil – 

nearly four years’ worth of consumption by light-duty vehicles at current levels.

By 2025, the standards for MY 2011-2025 will reduce oil consumption by an estimated 

2.2 million barrels a day – more than we import from any country other than Canada. 

As the vehicle fleet turns over and older vehicles are replaced with more efficient ones, 

the oil savings from these standards will grow, ultimately reaching over 4 million barrels 

a day – nearly as much as we import from all OPEC countries combined.

The MY 2011-2025 standards are critical to meeting President Obama’s goal of cutting 

oil imports by one-third by 2025, contributing over half the savings needed to meet the 

President’s goal.

Protecting human health and the environment.

The standards will reduce carbon dioxide pollution by over 6 billion metric tons –

equivalent to the emissions from the United States last year, or what the Amazon 

rainforest absorbs in three years.

The standards will protect public health by cutting air pollutants such as air toxics, 

smog, and soot.
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CHART 1: U.S. OIL CONSUMPTION BY SECTOR, 2009

Since 1978, the National Highway Traffic Safety Administration (NHTSA) has been setting fuel 

economy standards, known as Corporate Average Fuel Economy (CAFE) standards, that 

automakers must meet in each Model Year. They were first established by the Energy Policy 

and Conservation Act (EPCA) of 1975, in response to the concerns about oil dependence in the 

wake of the 1973-1974 Arab oil embargoes.

The first standards raised fuel economy for passenger cars from a level of 13 miles per gallon 

(mpg) in 1974 to 27.5 mpg in 1985. But after this initial burst of activity, the standards stayed 

flat for twenty-five years (even dipping for a few years in the late 1980s). When President 

Obama took office, the CAFE standard for passenger cars remained stuck at 27.5 mpg. 

Meanwhile, fuel economy standards for light-duty trucks rose slowly from 17.2 mpg for Model 

Year 1979 to 20.7 mpg for MY 1996. NHTSA increased the standards in 2003 and then again in 

2006, replacing the single average standard for each automaker’s light-truck fleet with a sizebased system that tied mileage requirements to a vehicle’s “footprint” – an approach that has 

since been adopted for passenger cars as well.

The Energy Independence and Security Act (EISA) of 2007 restructured and strengthened the 

CAFE program, requiring that the combined passenger car and light truck fleet reach 35 mpg by 

MY2020. Immediately after taking office in January 2009, President Obama directed NHTSA to 
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issue CAFE standards for Model Year 2011. Then, in April 2009, the President announced a 

historic agreement with a range of stakeholders – including automakers, the State of California,

the UAW, and national environmental organizations – to further raise fuel economy standards

and establish the nation’s first-ever greenhouse gas standards. The result was a unified 

approach that harmonizes NHTSA’s CAFE standards for fuel economy, the Environmental 

Protection Agency’s automotive greenhouse gas standards under the Clean Air Act, and 

California’s greenhouse gas program. Issued jointly by NHTSA and EPA in April 2010, the new 

federal standards are already making a difference in the fuel economy of the cars and trucks 

rolling off assembly lines today. Over the coming years, the standards continue to strengthen, 

so that the light-duty vehicle fleet in MY 2016 will achieve performance equivalent to 35.5 mpg

(as measured by EPA regulations) and attain a 250 g/mi greenhouse gas standard.

The new standards for Model Years 2017-2025 will build on that historic achievement. EPA and 

NHTSA have worked closely with stakeholders for months to ensure that these standards are 

achievable, cost-effective, and preserve consumer choice. Under the program, the stringency 

of standards for passenger cars will increase by an average of five percent each year. The 

stringency of standards for pick-ups and other light-duty trucks would increase an average of 

3.5 percent annually for the first five Model Years and an average of five percent annually for 

the last four Model Years of the program, to account for the unique challenges associated with 

this class of vehicles.
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CHART 2: LIGHT-DUTY VEHICLE FUEL ECONOMY STANDARDS, 1978-2025

SAVING CONSUMERS MONEY AT THE PUMP

In an economy that currently relies on oil, the price at the pump affects everybody– workers, 

farmers, truck drivers, small business owners. As long as we depend on oil to fuel our cars, 

volatile gas prices will continue to affect businesses’ bottom lines and families’ pocketbooks. 

But while fuel expenditures have climbed sharply over the past twenty five years, both in dollar 

terms and as a percentage of income, fuel economy standards have stayed flat. Over the 

period 2005-2009, the average household spent over $2,200 per year on gasoline and motor oil

each year, more than 4.5% of total household expenditures (Chart 3). In real dollar terms, 

that’s more than twice what households spent from 1985-1999, and a sharp increase from the 

first half of the last decade.
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CHART 3: AVERAGE ANNUAL HOUSEHOLD SPENDING ON GASOLINE AND MOTOR OIL, 1985-

2009

Thanks to the Administration’s fuel economy standards, a family that purchases a new car or 

truck will save thousands of dollars in fuel over the lifetime of the vehicle, on average, 

compared with a similar vehicle from Model Year 2010. Those savings increase steadily to 

nearly $8,200 for a new vehicle purchased in 2025 (Chart 4). That works out to hundreds of 

dollars in savings for households every year, year after year. (For reference, the average 

estimated fuel cost over the lifetime of a Model Year 2010 vehicle is $17,500.)
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CHART 4: ESTIMATED FUEL SAVINGS OVER THE LIFETIME OF AN AVERAGE VEHICLE, MODEL 

YEARS 2011-2025

When summed over all vehicles projected to be sold in Model Years 2011-2025, these savings 

amount to $1.7 trillion dollars in total savings to consumers as a result of the Administration’s 

fuel economy standards. (That $1.7 trillion represents the savings to consumers in future years; 

it equals $560 billion in present value discounted back to today.)

CUTTING OIL DEPENDENCE

The events in Libya and the Middle East over the past months serve as a compelling reminder of 

the importance of securing our energy future by reducing our dependence on oil. 

Since cars and light trucks account for 45 percent of total oil consumption in our economy, 

improving light-duty fuel economy is one of the most powerful levers we have for reducing oil 

dependence. The fuel economy standards will reduce oil consumption by an estimated 2.2

million barrels a day by 2025. To put that in context, that’s more oil than we import from any 

country except Canada (Chart 5). As the vehicle fleet turns over and older vehicles are replaced 

with more efficient ones, the oil savings from these standards will grow, ultimately reaching 

over 4 million barrels a day – nearly as much as we import from all OPEC countries combined. 

Over the life of the program, the new standards will save an estimated 12.2 billion barrels of oil 

– equivalent to nearly four years’ worth of fuel consumption by light-duty vehicles.
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CHART 5: PROJECTED FUEL SAVINGS COMPARED WITH 2010 OIL IMPORTS

These reductions in oil consumption will play a crucial role in helping to achieve President 

Obama’s goal of cutting oil imports by one-third by 2025. In fact, if all the reductions in oil 

consumption came from imported oil, the fuel economy standards alone would get us more 

than half of the way to the President’s goal.

PROTECTING HUMAN HEALTH AND OUR ENVIRONMENT

By using less oil, we will also protect human health by reducing air pollutants, and we will

secure our environment for future generations. The standards for Model Years 2011-2025 will 

reduce carbon dioxide pollution by more than 6 billion metric tons over the lifetime of the 

vehicles – equivalent the carbon dioxide emissions from the United States last year, or what 

the Amazon rainforest absorbs in three years. And by driving more fuel efficient cars and 

trucks, we will reduce emissions of the pollutants that contribute to local air pollution problems 

from smog and soot, as well as air toxics.

ESTABLISHING A FOUNDATION FOR U.S. LEADERSHIP IN AUTO MANUFACTURING 

The MY 2011-2025 standards build on the Administration’s efforts to strengthen the U.S. auto 

industry by providing a single national program for compliance. The standards establish clarity 

and predictability, allowing automakers the certainty they need to make investments in new 
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technologies and new manufacturing capacity here in the U.S. In doing so, they provide the 

foundation for U.S. leadership in advanced vehicle manufacturing. 

The U.S. auto industry is at the core of our manufacturing sector, employing 700,000 Americans 

manufacturing vehicles and vehicle parts, over one million involved in the sales and servicing of 

automobiles, and many more providing components and services to the industry. The 

President recognizes the vital importance of auto manufacturing jobs to communities and 

families across our country. In 2008, the combination of an historic recession and the financial 

crisis caused the loss of over 400,000 auto jobs and pushed the industry to the brink of collapse. 

In the face of this crisis, the President chose to stand behind the American auto industry and 

the countless workers, communities and businesses that depend on the U.S. automotive 

industry. Some experts estimated that were GM and Chrysler to liquidate, over 1 million jobs 

could have been lost. That decision was the right one. Since July of 2009, the auto industry has 

created over 113,000 jobs, its strongest period of job growth since the late 1990s, and Chrysler 

has repaid its outstanding loans to the U.S. Treasury. The Administration has also invested in 

the future of U.S. auto manufacturing, making historic investments through the Recovery Act in 

advanced vehicle technologies and infrastructure. With the support of this Administration’s 

investments, companies like Nissan and Ford are retooling and investing in new manufacturing 

capacity to build new, advanced vehicles in places like Smyrna, TN and Wayne, MI. 

Vehicle fuel economy is an increasingly important factor for consumers as they consider new 

vehicle options. According to a recent study, 42% of consumers view fuel economy as an 

‘Extremely Important’ purchase decision factor, up from 14% a decade ago.1 Over the past 

several years, average fuel economy for passenger cars has improved from 31 mpg in 2007 to 

34 mpg in 2010. The average vehicle is up to 29 mpg in 2010. In addition, demand for advanced 

technology vehicles has also increased, growing 37% in the first quarter of 2011. These vehicles 

make up a small portion of overall sales, but they are growing rapidly. 

 

1

Ford Motor Company. “MPG Matters: 42 Percent Say Fuel Economy Is Key in New Vehicle Purchase Decision; 

Influence Likely to Grow,” http://media.ford.com/article_display.cfm?article_id=34825
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A NEW GENERATION OF FUEL-EFFICIENT CARS AND TRUCKS

Fuel efficiency has long been considered the realm of small, lightweight cars. But as 

consumers demand more fuel-efficient vehicles, automakers are responding with 

innovations that turn the conventional wisdom on its head – and demonstrate the gains in 

fuel economy that can be achieved with affordable technologies that are on the road today.

The EcoBoost V6 engine package in the Ford F-150 full-size truck gets 22 mpg on the 

highway, a fuel economy savings of up to a 20% over the larger V8 package, while 

maintaining 365 horsepower and 420 lb-ft of torque. Demand for the EcoBoost 

engine in the F-150 has increased each month since its launch and is now running at 

approximately 40% of F-150 orders. Later this year, Ford plans to bring the EcoBoost 

engine to the Explorer SUV and the Edge CUV.

In much the same way, General Motors is seeing – and responding to – increased 

demand for more fuel-efficient vehicles. GM’s year-to-date sales are up, due to 

increased demand for its passenger cars, so much so that for the first time in 20 

years, a majority of the company’s sales came from passenger cars rather than from 

trucks, SUVs, and crossover vehicles. Paving the way have been the Chevrolet Cruze 

andMalibu , two of the company’s mid-size offerings, with fuel economy ratings of 

42 miles per gallon and 33 miles per gallon. In June, these two vehicles ranked 3rd

and 4th in sales, respectively, across all vehicles and brands.

The Hyundai Elantra, one of the most fuel efficient cars on the road (with a highway 

rating of 40 mpg), was rated number 1 out of 33 “Affordable Small Cars” by U.S. 

News for Model Year 2011. The 2012 Elantra includes Hyundai’s Active Eco System, 

which modifies engine and transmission control to smooth out throttle responses 

and offers drivers up to a 7% increase in real-world fuel economy.

Finally, the first dedicated Lexus hybrid is the HS 250h sedan, originally introduced in 

2010. With 187 horsepower, this luxury sedan is reported to reach 60 mph from a 

stop in 8.4 seconds, and still gets gas mileage of 35 mpg (city) and 34 mpg (highway). 

Using innovative technology, manufacturers such as Lexus are offering flexibility to 

drivers so that they can have a high-powered vehicle when passing, and a highly fuel 

efficient vehicle when navigating city streets.