If you find yourself filling up your gas tank more often than
you'd like to, help may be on the way. The White House is looking
for a big bump in fuel economy standards in vehicles, having them
rise steadily to 54.5 miles per gallon between 2017 and 2025.
Such a regulation will affect many companies, and it may affect
your portfolio, as well.
Calls for improved economy have been made in the past, and the
auto industry has often fought them. This time, though, following
a period of bailouts and wrangling with the government, the
automakers have capitulated, with 13 of them, including
) , and
to the proposals. In their place, though, auto dealers are now
objecting to the proposals, arguing in part that Americans don't
want more fuel-efficient vehicles.
The dealers have a point -- less than 3% of vehicles sold
recently have been hybrids. That's partly due to pricing, though,
and as sales grow, prices are likely to come down. Sales
been growing, too, with total Priuses sold in the U.S. surpassing
one million earlier this year.
Carmakers have been
developing alternative energy technologies
to power vehicles, such in as Nissan's all-electric Leaf and the
) that General Motors is using in its Chevy Cruze. They're also
looking into boosting efficiency by making cars lighter, via
plastics instead of metals.
The price of gas
isn't expected to come down
significantly, which is likely to sustain interest in
fuel-efficient machines. We investors may want to think through
what that might mean for our portfolios.
One possible loser is the oil business, if our gas consumption
falls markedly. Dig a little deeper before selling, though,
because many big oil companies are busy developing alternative
) , for instance, has partnered with
(WY) on a biofuels-from-forests project. Aluminum giants such as
(AA) also stand to suffer, if auto bodies shift strongly from
metal to plastic.
But despite their initial objections, carmakers
may not suffer at all
. Until commercially viable jet packs appear, we're likely to
keep needing vehicles, and fuel-efficient ones are likely to fit
the bill, meeting governmental regulations and being kinder to
If you're invested in companies related to these industries,
you'd do well to keep an eye on developments, as they can affect
your future net worth.
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