TAILIEUCHUNG - The U.S. Automotive Market and Industry in 2025

We’ve already made progress toward this goal – last year, America produced more oil than we had in the last seven years. We’re taking steps to encourage more offshore oil exploration and production – as long as it’s safe and responsible. And, because we know we can’t just drill our way out of our energy challenge, we’re reducing our dependence on oil by increasing our production of natural gas and biofuels, and increasing our fuel efficiency. Last year, we announced ground- breaking fuel efficiency standards for cars and trucks that will save consumers thousands of dollars and. | The . Automotive Market and Industry in 2025 CENTER FOR AUTOMOTIVE RESEARCH June 2011 The statements findings and conclusions herein are those of the authors at the Center for Automotive Research. Table of Contents Section I The . Motor Vehicle Market Outlook in 2025 A Baseline for Growth .2 Households and Vehicles per Urban and Non-Urban Split in Growth in the Light Vehicle Section II Pathways of Fuel Economy Improvements and Costs Through The Cost of Fuel Economy Retail Price Equivalent RPE .7 Modeling Extended Mass Reduction 15 Mass Reduction with Compounding .9 Spark-Ignited Extended Mass Reduction with Stop Start SI-E-SS .10 Plug-in Hybrid with Mass Reduction PHEV .10 Battery Electric Vehicle with Mass Reduction BEV .11 Cost Reduction Learning Curve and Economies-of-Scale .11 Four Scenarios for Higher Fuel Economy Mandates and the Per Vehicle Cost of these Scenario Description . 13 Section III The Economics of the . Motor Vehicle Market and Industry in The Effect of Mandates on the Net Price for Motor Present Value of Fuel Economy VMT Estimation .29 VMT rebound rate .31 The Cost of Cost Benefit Analysis of Higher Fuel Economy The Calculation of Net The Macro-economic Costs of Higher Fuel Economy The Baseline Forecast for Impact of Higher Net Price on the Quantity of Vehicle Demand Short-Run and Long-Run Price and Income Elasticities of New Vehicle . Vehicle Production and Employment in Center for Automotive Research 2011 i Section IV Conclusions and Recommendations for A Policy Appendix I Fuel Economy Technology Appendix II Forecast of . Light Vehicle Appendix III Calculation of Short and Long Run Price and Income Calculation of Short-Run Price and .

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