The Obama administration has clinched an agreement with 13 major automakers to increase fuel economy to 54.5 miles per gallon for cars and light-duty trucks by 2025.
Participating manufacturers include Ford, GM, Chrysler, BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota and Volvo - which together account for over 90% of all vehicles sold in the United States.
"This agreement on fuel standards represents the single most important step we've ever taken as a nation to reduce our dependence on foreign oil," President Obama explained.
"Most of the companies here today were part of an agreement we reached two years ago to raise the fuel efficiency of their cars over the next five years. We've set an aggressive target and the companies are stepping up to the plate. By 2025, the average fuel economy of their vehicles will nearly double to almost 55 miles per gallon."
The new fuel efficiency agreement builds on previous standards set for 2012-2016 vehicles, which effectively raises fuel efficiency to 35.5 mpg.
The Obama administration believes achieving a 54.5 mpg goal is likely to spur economic growth and create high-quality domestic jobs in cutting edge industries across America. The updated fuel efficiency standards are also expected to save American families $1.7 trillion dollars in fuel costs, and by 2025, result in an average fuel savings of over $8,000 per vehicle.
Additionally, it will dramatically cut the consumption of oil, saving a total of 12 billion barrels and by 2025, reduce oil consumption by 2.2 million barrels a day – as much as half of the oil America imports from OPEC every day.
Of course, the standards also curb carbon pollution, cutting more than 6 billion metric tons of greenhouse gas over the life of the program - which is more than the total amount of carbon dioxide emitted by the United States last year.