Analysis of CAR forecast for US auto industry, market in 2025
In December the Center for Automotive Research (CAR) presented projections for the U.S. auto industry and market that forecast substantially lower levels of production and employment in 2025 if stiffer fuel-economy and greenhouse-gas standards for new vehicles, now under consideration by the U.S. EPA and Department of Transportation, are adopted. The Alliance of Automobile Manufacturers cited the CAR forecast in letters to the House Committee on Energy and Commerce and the Committee on Oversight and Government Reform, whose chairman, Rep. Darrell Issa, has made a point of asking industry for input on the effect of regulations on job growth.
But the ICCT analysis of the CAR forecast uncovered basic technical errors that seriously undermine its credibility. Those errors are summarized in a letter to CAR, and detailed in a more comprehensive analysis here.
The cumulative effect of these errors, the ICCT analysis concludes, is to overstate increases in average vehicle cost and systematically underestimate fuel savings. Simply correcting for factual and mathematical errors in the CAR forecast would show fuel savings exceeding costs in the first five years of owning a vehicle. If CAR had used a more credible analytical approach and representative estimates for technology and cost, it would have reached exactly opposite projections: positive impacts on industry and growth in U.S. automobile sales, production, and employment.