Trump’s Fuel Efficiency Standards Rollback Leaves Auto Industry in Limbo

(Photo Credit: Jonathan Gallegos, Unsplash)

by | Apr 2, 2020

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Trump’s Fuel Efficiency Standards Rollback Leaves Auto Industry in Limbo

(Photo Credit: Jonathan Gallegos, Unsplash)

The Trump administration rolled back Obama-era fuel efficiency standards for automobiles this week, creating regulatory confusion for the auto industry.

On Tuesday, the DOT’s National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency released a final rule on corporate average fuel economy (CAFE) and CO2 emissions standards for model years 2021-2026.

Under the final rule, CAFE and CO2 emissions standards rise by 1.5% annually through model year 2026, according to the announcement. The Obama-era rule would have required a 5% annual increase during that time.

“The auto industry, without any regulation, has recently achieved an average annual increase in fuel economy of 2.4%, the New York Times reported. “The new rule, which is expected to be implemented by late spring, will roll back a 2012 rule that required automakers’ fleets to average about 54 miles per gallon by 2025. Instead, the fleets would have to average about 40 miles per gallon.”

Fuel economy has been a controversial topic since Trump first promised to relax the standards planned during the Obama administration. However, some automakers felt that the proposed rollbacks went too far.

Talks between the White House and the California Air Resources Board (CARB) over the standards broke down in early 2019. Last summer, Ford, Volkswagen, BMW, and Honda reached a voluntary agreement with CARB. Automakers signing on with California’s standards committed to reducing greenhouse gas emissions from their cars by almost 4% annually for five years, the San Francisco Chronicle reported at the time.

Then, in October, General Motors, Toyota, Fiat Chrysler, several smaller automakers, and the Association of Global Automakers sided with the Trump administration in a lawsuit over gas mileage rules. The lawsuit argued in favor of a set of clear national standards, as opposed to having separate federal and California rules, the Detroit News explained.

This week the Associated Press reported that automakers don’t want those divisions to continue.

“John Bozzella, CEO of the Alliance for Automotive Innovation, a trade group representing automakers, said the industry still wants middle ground between the two standards, and it supports year-over-year mileage increases,” according to the outlet.

A compromise isn’t likely to happen any time soon, however. The issue appears destined for a long legal battle.

“The new rule creates short-term regulatory relief for automakers, lifting requirements that had forced them to invest heavily in developing and marketing hybrid, electric, and low-pollution vehicles,” the New York Times reported. “But in the long run, analysts say, the new standard could actually bring more uncertainty to the auto industry.”

Several states and environmental groups have signaled intentions to sue the Trump administration over the new rule, and the case could make its way to the Supreme Court.

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