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 Ford
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 have 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 turbochargers from Honeywell
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 energies. Chevron
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 our wallets.
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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