Lower gas prices boost SUV sales in the US and deter climate goals


 

There has been huge demand for SUVs and trucks in the United States of America which is quite similar to the situation in India. Cheaper gasoline is leading to higher sales of these behemoths, thereby deterring climate goals.

 

Improvements in US fuel economy and reduction in greenhouse gas emissions appear to be deterred with this rise in SUV sales. There is an overwhelming disconnect between the Government’s climate goals and the consumer demand for bigger and less efficient automobiles. The National Highway Traffic Safety Administration sources stated that the arguments of automobile companies will be considered particularly in light of the fact that shifting away from cars will make it tougher to touch the targeted 2025 average fuel economy of 54.5 miles per gallon.

 

The pioneering agreement announced in France for changing a global economy driven majorly by fossil fuels could be off course for the US owing to opposite consumer demand. Customers are spurred by lower prices of gasoline which average a little above $2 for a gallon, the lowest ever in six years. Fuel efficiency of vehicles bought in November plunged down to 25 mpg, a drop of 0.8 mpg from the peak in August. A whopping 59% of US vehicles bought this year have been pickup trucks, SUVs and larger cars. Toyota has already stated how the Camry will be displaced by its RAV4 SUV as its top selling model in this market.

 

Trucks are largely becoming more efficient but gains are countered by shifting to trucks from cars. Automotive fuel efficiency regulations are a major component of President Obama’s climate strategy. Improved fuel efficiency will lead to reducing 6 billion metric tons of greenhouse gases over vehicle lifetimes. This applies to cars sold between 2012 and 2025. These rules will be costing the industry $157.3 billion as per estimates but consumers can expect to save $488 billion or more by way of gas savings.

 

These goals now appear less likely with customers taking to SUVs like fishes to water, much like the situation in India where Delhi grapples with a three month diesel vehicle ban and Indian customers keep snapping up SUVs and utility vehicles owing to lower diesel prices.

 

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