• Bloomberg


Toyota Motor Corp. is objecting to a fuel-economy target of 54.5 miles per gallon (23.17 km per liter) by 2025, which competitors support, as the Obama administration seeks to reach a consensus among carmakers selling in the U.S., according to three sources.

Toyota and some European carmakers say Ford Motor Co., General Motors Co. and Chrysler Group LLC are getting a break because fuel-economy standards for light trucks will rise more slowly than for cars, said the sources.

Obama is scheduled to make an announcement about the fuel standards Friday.

For the past two decades, Corporate Average Fuel Economy (CAFE) rules were easier on Japanese carmakers because they already sold smaller, more efficient vehicles and had to make fewer adjustments to meet a corporate fleet average. GM, Ford and Chrysler sold bigger vehicles and had to do more to be in compliance, said analyst Maryann Keller.

“The Japanese were always the winner on CAFE because the standards allowed them to make more less-efficient vehicles,” said Keller, who served on a National Academy of Sciences panel on fuel economy in 2003. “Now they will have to start really improving the fuel economy of their cars.”

Changes to the proposal can be made before the first draft of the rule is published by Sept. 30. The final rule will be published next year and take effect in 2017.

No deal has been signed yet. Automakers were awaiting paperwork from the White House to formalize agreements.

Cars must improve fuel economy at least 5 percent a year from 2017 to 2025, and trucks must get 3.5 percent more efficient a year from 2017 to 2021 and 5 percent in the last four years, according to the proposal.

BMW AG and Mercedes-Benz parent Daimler AG are also objecting, saying the leniency on trucks places more of a burden on companies that rely more heavily on car sales.

The Environmental Protection Agency and National Highway Traffic Safety Administration are writing the rule with California’s Air Resources Board, which has the authority to write its own air-quality rules if it disagrees with U.S. rules. If California hadn’t agreed to the proposal, it wouldn’t have been offered to automakers, a person briefed on the negotiations said.

Toyota’s objections show the fault line between carmakers as the industry works with Barack Obama’s administration to craft fuel-economy rules.

GM, Ford and Chrysler said they would agree to a deal if the new rules are lenient on fuel-economy improvements for pickup trucks, which are more profitable than cars for them, three people said. Non-U.S. carmakers chiefly sell cars and SUVs in the country.

The government proposal includes credits for equipment that can reduce fuel consumption, such as technology that shuts off engines when cars are idling and louvered front grilles that improve aerodynamics, three sources said. The administration is considering giving pickup trucks more credit than cars for using the same such technologies.

Toyota has been a fuel-economy leader with its Prius hybrid car. Dan Becker, executive director of the Washington-based environmental lobby group Safe Climate Campaign, said the company is stalling on an agreement.

“Toyota is a laggard,” Becker said. “It’s a little disappointing for the company that brought us the Prius.”

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