Obama Fuel-Economy Rule Gives Sweeteners to Honda, Tesla

Honda Motor Co. (7267), which last year complained that a proposed fuel-economy rule was unfair to non- U.S. automakers, got a boost when the final version added extra credits for sellers of natural gas-powered vehicles.

Honda, based in Tokyo, is the only automaker selling compressed natural gas-powered cars to U.S. drivers and will be able to use the credits to meet the fuel-economy standards. It’s one of the few changes made to a rule for 2017 to 2025 that was proposed in November 2011 and released in final form by President Barack Obama’s administration yesterday.

“Providing incentive credits for natural gas vehicles makes a great deal of sense under this regulation,” Edward Cohen, Honda vice president of government and industry relations, said in an e-mail yesterday. “A dedicated natural gas vehicle reduces CO2 emissions by 25 percent and petroleum consumption by 100 percent.”

The corporate average fuel economy, or CAFE, rule may cost the auto industry as much $136 billion to comply with, while saving consumers up to $451 billion in fuel costs, regulators from the U.S. Environmental Protection Agency and National Highway Traffic Safety Administration said in a briefing. They declined to be named because they weren’t authorized to be quoted about the rule.