Four Things Obama's Re-Election Means For Cars

David Kiley | AOL Autos

Nov 8, 2012

There is little doubt that the taxpayer rescue of the U.S. auto industry authorized by President Obama in 2009 was key to his re-election, boosting his popularity in Michigan, Ohio, Wisconsin and Pennsylvania.

This President, who engineered direct investment into General Motors and Chrysler in order to keep them whole and in-tact instead of being chopped up, will be more associated with the auto industry than any other U.S. president that has gone before him.

The next four years of the Obama Administration will continue to reverberate through the cars we buy in the form of regulation about emissions, fuel economy, safety and more market penetration of electric vehicles. Here is what to expect:

EV Tax Credits Will Go Up

The current tax credit for electric vehicles and extended-range electric vehicles is $7,500. President Obama has said that he would like to jack up the tax credit for cars like Chevy Volt, Nissan Leaf, Toyota Prius Plug-in and Ford Focus EV to $10,000.

There is much controversy over whether subsidy of EVs should continue. Consumers have been lukewarm to the new vehicles. Many believe the government should not be subsidizing certain kinds of vehicles over others. There are a few causes holding back these vehicles: a lack of education about how they work; lack of extended infrastructure of charging stations; and high starting sticker prices.

But expect the Obama Administration to keep up the investment, as well as the attention on EVs and extended-range EVs and hybrids.

Check Out: Chevrolet Volt Real-World Test Drive

Govt. Will Likely Sell Its GM Stake

This is mostly guesswork, but there is likelihood that the President will greenlight the sale of the 26% stake the government currently holds in General Motors.

An equity stake in the automaker is the way that the White House Task Force chose to finance the rescue back in 2009. GM shares trade in the mid-$20 range on the New York Stock Exchange, well below its initial-public-offering price. So, if the feds sold their shares today the taxpayer would incur a big loss. The break-even point for the government is $53 a share, a price that is pretty far from analysts projections in the next two years.

Now that President Obama doesn't have to run for re-election, and there are experts who say GM would be better off in the market without the government stake, there is an expectation that the tax-payer will be out of GM by the end of his second term.

Check Out: The Truth Squad: Arguing The Auto Rescue Between The Campaigns

Higher Fuel Economy Standards Will Stay On Track

The Obama Administration already finalized new fuel economy rules that set annual targets that ramp up to the equivalent of 54.5 mpg by the 2025 model year.

Candidate Mitt Romney had been campaigning that he would look to lighten the standards. Now, they will go into effect without major changes through the end of Obama's second term in 2016. This will mean a continuation of fewer 8 cylinder vehicles coming to market, more four-cylinder vehicles, more fuel saving technology such as "stop-start" systems that cut off the engine at idle and more hybrids and electric vehicles.

Check Out: How Stop-Start Systems Work, And What Cars Come With Them

Back-Up Cameras On Every Car

There is a pending mandate to put back-up cameras in every new car sold by 2014. It was actually introduced in 2008 under President Bush. But President Obama put a hold on the rule earlier this year to give automakers a chance to make changes. At issue is the $58 to $203 per car it will cost to implement. It doesn't sound like much, but it adds up to millions of dollars for each of the 200-240 lives the mandate is supposed to save (children who die from cars backing up on them). The challenge is to equip cars that wouldn't otherwise come with dashboard video displays.

Look for the Obama Administration to find a way to make it happen as backing off of a child safety mandate won't look good for him, his party or the National Highway Traffic Safety Administration.

Check Out: Techsplanations: Pedestrian Safety Design