The fuel economy requirements for U.S. cars are revving up.
The U.S. Department of Transportation announced new corporate average fuel economy (CAFE) standards April 1 that call for an industrywide fleet average of about 49 miles per gallon by the 2026 model year.
That's a big jump for the auto industry to make — 8 percent higher in the 2024 and 2025 model years and 10 percent by 2026 — but don't expect to hear automakers complain. After all, a federal push toward more efficient vehicles should even the playing field for automakers making billions of dollars of investments to build electric and hybrid cars and trucks. So those companies that are spending money on battery systems and electric motor components should see a return on their investment.
For the plastics industry, meanwhile, the demand for higher fuel economy should help to sell more material substitutions of lighter composites and plastics in place of metal. And suppliers have also been investing for future vehicles. Just look at the recent acquisitions and investments by firms like Plastic Omnium for one example.