Are emission standards the final nail in Detroit's coffin?

President Obama is set to announce the first-ever national emissions limits for vehicles later today, and will require a 35.5 mile-per-gallon fuel efficiency standard. The announcement was confirmed by Vice President Joe Biden as he was giving tours of the super-secret 9/11 bunker ... just kidding. It was confirmed by Carol Browner, the White House energy and climate director.

This plan couples pollution reduction from vehicle tailpipes and increased efficiency on the road. The plan should save 1.8 billion barrels of oil through 2016 and will be the environmental equivalent to eliminating 177 million cars from the road. According to the plan, new vehicles will be 30% cleaner and more fuel-efficient by the time the program is in full effect in 2016. New vehicles may then cost an extra $1,300.

Thanks to the plan, the auto industry will need to increase production of fuel-efficient vehicles at a quicker pace than originally expected. The price tag will also be hefty, as the Transportation Department estimated a year ago that requiring the industry to meet 31.6 MPG by 2015 should cost nearly $47 billion.

Yes, these rules "could radically reshape the U.S. automotive industry," but it could also hurt Detroit automakers. For light trucks, the new standards will be 30 MPG, up from the current benchmark of 23.1 MPG. I'm no car expert, but I believe it is going to take a great deal of technology and work to ramp up the MPG standards from 23.1 to 30. In fact, both Chrysler and General Motors (NYSE: GM) have asked for "several billion dollars" in loans from the federal technology program to pay for new, fuel-efficient models like the Chevy Volt.

The timing of this announcement could have been better, especially in light of the current economic situation in the auto realm.

I will not say that these emission standards are sounding a death knell for Chrysler and GM, but they are going to be difficult for struggling Detroit automakers to meet unless they get some (more) help from the government.
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