As expected, the Obama Administration set an official Corporate Average Fuel Economy (CAFE) target for 2025 at 54.5 MPG. While this is down from earlier expected numbers that went as high as 62 MPG, it’s still a substantial increase that seems to have found a happy medium for opposing voices.

President Obama made the announcement today amid some of the most important people in the auto industry. There was also a small parade of eco-friendly vehicles like the Nissan Leaf, Chevy Volt and several hybrids and eco-friendlier trucks like the EcoBoost backed Ford F-150.

As we are on the verge of seeing the Obama Administration’s Cash for Clunkers program on the verge of becoming a reality, we’re now starting to hear more dissenting voices that warn that the program might not jump start U.S. auto sales like they hoped.

Arguably, the problem comes from it seeing so many changes since it’s original introduction. It’s current form was recently analyzed by four experts at Automotive News who estimate that the bill will only result in new car sales of 70,000 – 200,000.

They base this estimate on three main issues surrounding the Cash for Clunkers program.

The first issue being that the limit of 18mpg doesn’t encompass enough vehicles. The second being that clunkers will only be able to be turned in between July 1 and November 1. And finally, they point out that most people who could afford a new car would probably already have bought one and that even with the maximum discount of $4,500 it probably still makes more sense to buy a used car.

One thing is for sure though, at very least we will see some polluting clunkers pulled off the road and replaced with newer, cleaner vehicles. Whether or not it manages to give a the struggling US auto industry a boost remains to be seen.

President Obama has made it official. The United States fuel economy standards are being increased starting in 2012, which edges up the current standards by 5% a year to a fleet average of 35.5 MPG in 2016. This makes the CAFE law passed by Congress in 2007 – which required new vehicles an average fuel economy of 35 mpg in 2020 – relatively useless. These New American Fuel Economy Standards should also bring with it a reduction of 900 million metric tons in greenhouse gas emissions.

From the White House press release:

“In the past, an agreement such as this would have been considered impossible,” said President Obama. “That is why this announcement is so important, for it represents not only a change in policy in Washington, but the harbinger of a change in the way business is done in Washington. As a result of this agreement, we will save 1.8 billion barrels of oil over the lifetime of the vehicles sold in the next five years. And at a time of historic crisis in our auto industry, this rule provides the clear certainty that will allow these companies to plan for a future in which they are building the cars of the 21st century.”