China to impose duties on imported cars from U.S.

China said today it would impose anti-subsidy and anti-dumping duties on imported cars made in the United States, the latest in a series of trade spats between the world's two largest economies.

The duties, to affect the Detroit 3 and some U.S.-based foreign automakers, will begin tomorrow and last two years, the Commerce Ministry said on its Web site. Cars that have engine capacity at or above 2.5 liters will be hit with duties ranging from 2 percent to 21.5 percent.

General Motors Co. will face anti-dumping and countervailing duties ranging from 8.9 percent to 12.9 percent. Chrysler Group's will range from 6.2 percent to 8.8 percent, while the U.S. units of BMW AG and Mercedes-Benz will face duties of 2 percent and 2.7 percent, respectively.

The ministry's statement said U.S.-made cars and SUVs benefited from subsidies and had been dumped into the China market, causing "substantial damage to China's domestic industry".

U.S.-China trade tensions have been mounting in recent months, particularly in the solar industry, where tit-for-tat trade probes have underscored leaders' warnings of a rising tide of protectionism amid gloomy global economic forecasts.

Ten years after China joined the World Trade Organization, experts say it is likely to become more deeply enmeshed in trade disputes.

More problems for Beijing at the trade governing body will be partly due to its ever-expanding trade footprint, but also because many of its trading partners have growing concerns over what they see as state support for strategic industries.

The United States has filed trade 12 cases against China since it joined the WTO, five since U.S. President Barack Obama took office.

China's Commerce Minister Chen Deming said in late November the country is likely to fight back if other countries resort to trade protectionism.

U.S. 54.5 mpg rule may add $2,000 to car prices by 2025

A proposed U.S. rule requiring automakers to double average fuel economy of vehicles to 54.5 miles per gallon by 2025 would add an average of $2,000 to the price of each passenger vehicle sold, two agencies said.

The National Highway Traffic Safety Administration and Environmental Protection Agency made the projection in posting the proposal today on NHTSA's Web site. Benefits of $419 billion to $515 billion would offset $157 billion in costs, the highway agency wrote.

The draft detailed a proposal agreed to in July by President Barack Obama's administration and automakers including Ford Motor Co., Honda Motor Co., Toyota Motor Corp. and General Motors Co. to take effect in 2017.

Daimler AG and Volkswagen AG were among automakers that didn't sign on and weren't part of a ceremony in Washington where Obama touted the rule as part of his plan to reduce the use of imported oil in the United States.

The proposed rule requires annual fuel-economy increases of 5 percent for cars. Light trucks such as pickups and SUVs can raise fuel economy at 3.5 percent for the first five years the rule will be in effect. Then, unless regulators decide differently in a midterm review, trucks also would have to boost fuel economy by 5 percent a year.

"The proposed regulations present aggressive targets, and the administration must consider that technology break-throughs will be required and consumers will need to buy our most energy- efficient technologies in very large numbers to meet the goals," Mitch Bainwol, CEO of the Alliance of Automobile Manufacturers, said in an e-mailed statement.

NADA objects

The National Automobile Dealers Association objected to today's announcement.

"America's auto dealers support continuous improvement in the fuel economy of the fleet of vehicles that drive on the nation's roads," the association said in a statement. "To this end, we are concerned that adding about $3,000 to the average cost of a car will price millions of Americans out of the market, which could reduce fleet turnover and delay environmental gains."

Representative Darrell Issa, a California Republican, opened an investigation into how it was written, saying it was rushed and may jeopardize safety by reducing the weight of vehicles on the road.

California, which has the authority to write its own air- quality regulations, plans to issue its own rule, the White House said today in an e-mailed statement.

By 2025, U.S. fuel-economy standards and other fuel- efficiency moves will save 12 billion barrels of oil; reduce oil consumption by 2.2 million barrels a day, about one-fourth of the oil the country imports; and save consumers more than $8,000 a vehicle in fuel costs, the White House said in a statement today.

House letter

Representative Ed Markey, a Massachusetts Democrat, and 107 other U.S. House members yesterday sent a letter to Obama supporting the rule.

"We believe that these standards to reduce petroleum use in cars and light trucks represent an opportunity to increase our national and economic security in an unprecedented way by dramatically decreasing our dependence on foreign sources of petroleum," they wrote.

A proposed rule had been due Sept. 30 before regulators said they needed more time. The final rule is scheduled to be published next year.

A separate rule issued in 2009, which takes effect next year, requires automakers to increase average fuel economy to 35.5 mpg by 2016.

PRESS RELEASE: Obama Administration Proposes Historic Fuel Economy Standards to Reduce Dependence on Oil, Save Consumers Money at the Pump

Next phase in national program for light-duty vehicles will save consumers thousands of dollars at the pump while saving billions of barrels of oil, curbing pollution, enabling long-term planning for automakers

WASHINGTON – Building on President Obama's historic national program, the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Transportation (DOT) today formally unveiled their joint proposal to set stronger fuel economy and greenhouse gas pollution standards for Model Year 2017-2025 passenger cars and light trucks. Cars, SUVs, minivans, and pickup trucks are currently responsible for nearly 60 percent of U.S. transportation-related petroleum use and greenhouse gas emissions.

Today's announcement is the latest in a series of executive actions the Obama Administration is taking to strengthen the economy and move the country forward because we can't wait for Congressional Republicans to act. When combined with other historic steps this administration has taken to increase energy efficiency, this proposal will save Americans over $1.7 trillion at the pump, more than $8,000 per vehicle by 2025. These combined actions also will reduce America's dependence on oil by an estimated 12 billion barrels, and, by 2025, reduce oil consumption by 2.2 million barrels per day – enough to offset almost a quarter of the current level of our foreign oil imports. Taken together, these actions will also slash 6 billion metric tons in greenhouse gas emissions over the life of the programs.

Today's proposed standards alone will slash oil consumption by 4 billion barrels and cut 2 billion metric tons of greenhouse gas pollution over the lifetimes of the vehicles sold in those years.

"These unprecedented standards are a remarkable leap forward in improving fuel efficiency, strengthening national security by reducing our dependence on oil, and protecting our climate for generations to come. We expect this program will not only save consumers money, it will ensure automakers have the regulatory certainty they need to make key decisions that create jobs and invest in the future," said U.S. Transportation Secretary Ray LaHood. "We are pleased that we've been able to work with the auto industry, the states, and leaders in the environmental and labor communities to move toward even tougher standards for the second phase of the President's national program to improve fuel economy and reduce pollution."

"By setting a course for steady improvements in fuel economy over the long term, the Obama administration is ensuring that American car buyers have their choice of the most efficient vehicles ever produced in our country. That will save them money, reduce our nation's oil consumption and cut harmful emissions in the air we breathe," said EPA Administrator Lisa P. Jackson. "This is an important addition to the landmark clean cars program that President Obama initiated to establish fuel economy standards more than two years ago. The progress we made with the help of the auto industry, the environmental community, consumer groups and others will be expanded upon in the years to come -- benefitting the health, the environment and the economy for the American people."

The proposed program for MY 2017-2025 passenger cars and trucks is expected to require increases in fuel efficiency equivalent to 54.5 mpg if all reductions were made through fuel economy improvements. These improvements would save consumers an average of up to $6,600 in fuel costs over the lifetime of a MY 2025 vehicle for a net lifetime savings of up to $4,400 after factoring in related increases in vehicle cost. Overall, the net benefit to society from this rule would total more than $420 billion over the lifetime of the vehicles sold in MY 2017-2025.

Today's action builds on the success of the first phase of the Obama Administration's national program(2012-2016), which will raise fuel efficiency equivalent to 35.5 mpg by 2016 and result in an average light vehicle tailpipe CO2 level of 250 grams per mile. These standards are already in effect and saving consumers money at the pump now. Combined with 2011 fuel economy standards and the standards in effect for 2012-2016, today's proposal represents the most significant federal action ever taken to reduce greenhouse gas emissions and improve fuel economy. Taken together, these actions would reduce greenhouse gas emissions by half and result in model year 2025 light-duty vehicles with nearly double the fuel economy of model year 2010 vehicles.

The national policy on fuel economy standards and greenhouse gas emissions created by DOT and EPA provides regulatory certainty and flexibility that reduces the cost of compliance for auto manufacturers while reducing oil consumption and harmful air pollution. By continuing the national program developed for MY 2012-2016 vehicles, EPA and DOT have designed a proposal that allows manufacturers to keep producing a single, national fleet of passenger cars and light trucks that satisfies all federal and California standards. It also ensures that consumers will continue to enjoy a full range of vehicle choices with performance, utility and safety features that meet their individual needs.

The standards will rely on innovative technologies that are expected to spur economic growth and create high-quality jobs across the country. Major auto manufacturers are already heavily invested in developing advanced technologies that can significantly reduce fuel use and greenhouse gas emissions beyond the existing model year 2012-2016 standards. In addition, a wide range of technologies are currently available for automakers to meet the new standards, including advanced gasoline engines and transmissions, vehicle weight reduction, lower tire rolling resistance, improvements in aerodynamics, diesel engines, more efficient accessories, and improvements in air conditioning systems. The standards should also spur manufacturers to increasingly explore electric technologies such as start/stop, hybrids, plug-in hybrids, and electric vehicles. The MY 2017-2025 proposal includes a number of incentive programs to encourage early adoption and introduction of "game changing" advanced technologies, such as hybridization for pickup trucks.

The proposal released today follows President Obama's announcement in July that the Administration and 13 major automakers representing more than 90 percent of all vehicles sold in the U.S. have agreed to build on the first phase of the national vehicle program. EPA and DOT worked closely with a broad range of stakeholders to develop the proposal—including manufacturers, the United Auto Workers, the State of California, and consumer and environmental groups.

There will be an opportunity for the public to comment on the proposal for 60 days after it is published in the Federal Register. In addition, DOT and EPA plan to hold several public hearings around the country to allow further public input. California plans to issue its proposal for model year 2017-2025 vehicle greenhouse gas standards on December 7 and will finalize its standards in January. .

To view NHTSA and EPA's Notice of Proposed Rulemaking, visit http://www.nhtsa.gov/fuel-economy.

For more information, visit http://www.epa.gov/otaq/climate/regulations.htm or http://www.nhtsa.gov/fuel-economy.

When you do the math, promoter extraordinaire Terry McAuliffe's grand hybrid vehicle plan just doesn't add up

Terry McAuliffe, the former head of the Democratic National Committee and political ally of Bill and Hillary Clinton, has bold and beautiful plans to hire U.S. workers to produce hybrids and electrics.

McAuliffe says he can develop hybrid powertrains, assemble highway-ready vehicles that meet all federal safety and emissions standards, and employ 5,000 U.S. workers. He even plans to export advanced parts to a planned joint-venture auto-assembly plant in China.

"The powertrains, batteries, will be made here and shipped" to China, McAuliffe said Aug. 8 on "The Daily Rundown," a talk show on MSNBC.

But even casual scrutiny of his vision reveals overwhelming obstacles. Let's be plain: His plan is dead on arrival.

He casts himself and his company as part of the solution for a country struggling with 9 percent unemployment, unsparing global competition and gridlocked politics.

But McAuliffe, a born promoter who set eye-popping records as the Democratic Party's fund-raiser in chief, glosses over the sheer magnitude of the task.

To understand the challenge, take General Motors. It invested more than $1 billion in the Chevrolet Volt plug-in hybrid and its technologies, which will be spread over other upcoming vehicles.

In recent years GM has added nearly 2,000 engineers to support its various hybrid and electric-vehicle technologies. And it has spent $700 million in Michigan alone to support vehicle electrification, including test facilities, a battery manufacturing lab and special equipment at its Detroit-Hamtramck assembly plant.

And what does McAuliffe's company, GreenTech Automotive, have? About 50 employees, says Alan Himelfarb, executive vice president for strategic planning. Not even 50 engineers. Fifty total employees.

What keeps the vision alive is McAuliffe's audacity. With confidence and verve, he spells out his job-creating optimism on friendly national cable shows such as "The Daily Rundown" and "The Ed Show," also on MSNBC.

And he wraps his goals in feel-good hot buttons: cleaning up the environment and taking on the growing economic might of China.

"We can achieve two important goals at once. We can provide China with clean technology and help reduce carbon emissions in the country," said McAuliffe, chairman of GreenTech, in an Aug. 6 press release about the China factory. The China project will create 2,000 jobs for Americans, he said.

Superb fundraiser

Political pro Terry McAuliffe has a track record raising big money -- but can he put hybrids on the road?

McAuliffe, a high-energy speaker with a quick and charming smile, is a superb fundraiser. His biography on the GreenTech Web site says that under his leadership the Democratic National Committee set party records by raising more than $535 million.

After a four-year stint at chairman of the committee from 2001 to 2005, he was chairman of Hillary Clinton's presidential campaign. In 2009 he ran unsuccessfully for governor of Virginia.

In the auto industry, though, he's a newcomer. Bold auto visions are fine. But they require staggering amounts of money and manpower. And there's no tangible indication that McAuliffe has either.

That hasn't slowed McAuliffe's promotional machinery. Most recently, GreenTech said on Aug. 6 that it had signed a deal to construct a joint-venture factory in China to assemble 300,000 vehicles a year for the Chinese market.

The Chinese partner is Shengyang Zhong-Rui Investment Co., which GreenTech says has investments in banking, commercial real estate and Chinese airlines. But no investments in automotive operations are listed in the GreenTech press release.

GreenTech says the vehicles, "subcompact, compact, midsize and sports," will be powered by "U.S.-made high-efficiency combustion engines, hybrid powertrains and pure electrical drivetrain" and sold only in China.

Hybrid powertrains, which combine an internal combustion engine, an electric motor, regenerative braking, a large propulsion battery and other advanced components, require millions of lines of software code and world-class engineering and manufacturing.

Meanwhile, GreenTech's Web site also says is has a line of vehicles in development that will be "fully NHTSA- and EPA-certified, full-speed, all-road vehicles." The autos will be assembled in a plant in Mississippi that the company acknowledges is still in the planning stages.

GreenTech, along with suppliers, will invest $1 billion in the Mississippi assembly complex, the company says. A 2010 press release says the cars will go on sale around 2013-14.

And the Web site of the Ordos provincial government in China says GreenTech pledged to start production of hybrids and electrics at its plant in 2013.

But last week the company scaled back those estimates.

"Our expanding product portfolio, including hybrid and electric full-speed vehicle will come in due time and we have not yet set a timetable for the next product introduction" after this year's neighborhood electric vehicle, the company said in a statement. "We fully understand the challenges in time, money, and technical expertise to produce a quality hybrid or electric vehicle."

Even without a timetable, it is not credible that a company with 50 employees now can develop, even with help from major suppliers, a full line of vehicles, master hybrid powertrains, construct an assembly plant and put together a dealer network.

"We are very realistic'
Last week, GreenTech's Himelfarb acknowledged skepticism about starting an auto company from scratch. But he said, "We are very realistic about the challenge."

He made these points about the gap between the vision and reality:

-- Staffing. GreenTech's staff is small now, but it is hiring and plans to have 100 employees by year end, Himelfarb said. And it plans to use major global suppliers and engineering firms with the talent and resources to develop vehicles and powertrains. So the jobs promised by GreenTech could be at suppliers. Himelfarb declined to name those suppliers.

-- Money. Himelfarb insisted GreenTech has money to meet its business plan. "We are very well financed," he said. He declined to reveal the source of the company's funds.

-- Mississippi assembly plant. Site preparation has started in Tunica County, he said, but GreenTech has not yet hired major contractors capable of building and equipping an assembly plant.

-- Neighborhood electric vehicles. To "get its feet wet" in autos, Himelfarb said, the company is gearing up to produce low-speed electrics, which are mainly suitable for resorts and retirement villages. They have turn signals, seat belts and other safety features but are not legal on roads with speed limits above 35 mph.

It plans to start modest production of the MyCar electric at a former elevator factory in Horn Lake, Miss., also in Tunica County, 15 miles south of Memphis, Tenn., in the third quarter. MyCar was designed by a Hong Kong company GreenTech acquired in 2010.

GreenTech says it has signed Greenabout, a Danish company, to distribute American-made MyCars in Denmark.

In expansive tones typical of its press releases, GreenTech makes over-the-top forecasts for the MyCar. A press release says: "We will make the first 100,000 U.S.-built MyCars available to consumers for $10,000 apiece."

But the entire market for low-speed vehicles in the United States last year was only 25,650, says International Market Solutions, a market research firm in Cortlandt Manor, N.Y., that specializes in what it calls small, task-oriented vehicles. Low-speed vehicles include golf carts and most vehicles that generally are called neighborhood electrics.

In a written statement to Automotive News, GreenTech said neighborhood electrics "are a small market for sure, at least right now. We have a few ideas on how to create some awareness and build that market. Our goal of 100,000 units is a cumulative sales figure over time. We look forward to achieving that."

Like all of GreenTech's projects, its neighborhood electrics are long on promotion and short on credibility. And road cars are a lot tougher to make and sell than golf carts.

U.S. should install electric car charging stations, Nissan says

NEW YORK (Bloomberg) -- The Obama administration's goal of putting 1 million hybrid and electric vehicles on U.S. roads by 2015 is "reasonable" if the government builds hydrogen fueling and electric-charging stations nationwide, a Nissan Motor Co. executive said.

"Carmakers can't go and put hydrogen fueling and charging stations throughout the U.S., but the government can," Andy Palmer, a senior vice president at Nissan said in an interview at a conference in New York Wednesday.

There are 722 electric car charging stations in the U.S., with 60 percent of those in California, according to the Energy Department. There are 58 hydrogen fueling stations in the nation, again with the most in California than any other state. U.S. sales of hybrid and electric vehicles could reach 1.6 million by the end of the decade, or 9 percent of all cars, Albert Cheung, a Bloomberg New Energy Finance analyst said in a presentation at the conference.

By 2030, sales could reach 4 million vehicles, he said. Models available today include Nissan's all-electric Leaf, and General Motors Co.'s Chevrolet Volt, which uses a gasoline engine to charge a battery. Ford Motor Co. makes the Transit Connect, an electric delivery van. U.S. government purchases accounted for about a fourth of the Ford and GM hybrid vehicles sold since President Barack Obama took office, according to government data.

Government purchases 

The U.S. General Services Administration, which runs the government fleet, bought at least 14,584 hybrid vehicles in the past two fiscal years, or about 10 percent of 145,473 vehicles the agency purchased in that period, according to sales data obtained by Bloomberg under a Freedom of Information Act request.

That's up from fiscal 2008 when hybrids accounted for less than 1 percent of government purchases, the data showed.

"Government fleets create momentum, but they're not the be all and end all," Palmer said. "The more vehicles you get out into customer hands, the more people start to understand that an electric car is not the same as a golf cart."

This is especially important as Japan's Nissan, GM and other carmakers developing hybrid and electric vehicles are looking for ways to further develop technologies. Longer-lasting batteries would increase product reliability and help make prices more attractive to consumers, he said. Hybrid and electric vehicle models purchased by the government ranged from $23,072 to $47,079.

The government paid an average of $5,281 less for its hybrid vehicles than sticker prices, according to a comparison of the GSA purchase data with prices collected by Edmunds.com, a consumer information Web site.