Improved Mileage Pays Off

Citigroup Report Says Automakers Can Profit from CAFE Standards
By GreenBiz.com

WASHINGTON -- Anticipating legislation that will boost required gas mileage for cars in the United States, Citigroup has released a report showing that the auto industry can improve mileage and improve profits at the same time.

The report comes as the U.S. Congress is considering bills to raise the standards for the Corporate Average Fuel Economy (CAFE) standards, which dictate the miles per gallon achieved by an automaker's vehicle line. In June, the Senate passed a bill that would raise the average to 35 mpg by 2020, a 40 percent increase over the average 24.1 mpg currently achieved by the six major U.S. car companies.

"When you have the world's number one bank, which has financial ties to many major automakers, saying fuel economy standards are a good economic play, it drives a stake through the heart of the auto industry's scare tactics," said Representative Edward J. Markey of the House's Select Committee on Energy Independence and Global Warming.

The report, "CAFE and the U.S. Auto Industry; A Growing Auto Investor Issue, 2012-2020," was created by Citigroup, working together with Ceres and the Investor Network on Climate Risk. The report examines predicted changes to the CAFE standards, and finds that improved mileage requirements will be good for manufacturers as well as for the environment.