Carmakers proceed cautiously after EPA mpg announcement
Washington — Detroit automakers say they’re committed to increasing the fuel economy of their cars, despite President Donald Trump administration’s decision to initiate a rollback of stringent gas mileage rules enacted by the Obama administration.
Automakers struck muted tones in response to Monday’s announcement that the U.S. Environmental Protection Agency and the National Highway Traffic Safety Administration would revise Obama-era mileage rules that would have required automakers to produce car fleets that averaging more than 50 miles per gallon by 2025. New guidelines have not been announced.
The restraint on the part of carmakers came despite that fact that industry lobby groups in Washington had pushed the Trump administration to ease Corporate Average Fuel Economy standards. And as California officials vowed to fight any attempt to supersede tougher standards in that state, carmakers advocated for a single national standard.
California sets its own environmental standards under a waiver included in the 1970 Clean Air Act. A dozen other states have adopted California rules, accounting for a third of the nation’s auto market.
Jessica Caldwell, executive director of industry analysis for Edmunds.com, said the looming standoff between the Trump administration and California over mileage rules could create a “logistical nightmare” for carmakers who would have to comply with two different sets of environmental regulations in the U.S.
“California has made it very clear that it’s ready to fight for the right to maintain its own standards, and when you consider how long a court battle could take, it puts automakers in a very challenging scenario from a product development perspective,” Caldwell said.
Complicating matters further for carmakers, governments in Europe and China, which is the world’s largest auto market, have moved aggressively to lower auto emissions and in many cases they are considering banning gas and diesel engines altogether.
Karl Brauer, executive publisher of Autotrader, said automakers could be forced to keep advancing fuel-efficiency efforts — regardless of U.S. standards — if they want to compete in foreign markets. He acknowledged U.S. drivers would probably prefer to have the choice of buying powerful vehicles that have met lower domestic emission requirements: “Given the current trend of U.S. car buyers, who have generally ignored fuel-efficiency in favor of larger, more powerful vehicles, that scenario might resonate with car shoppers.”
Automakers released cautious statements about the revisions.
“We continue to support increasing clean car standards through 2025 and we have not asked for a rollback,” Ford Motor Co. said. “We will continue to work with EPA, NHTSA and California on one national standard with additional flexibility to help us provide more affordable options for our customers.”
General Motors Co. said, “Regardless of the standards, we remain committed to improving fuel economy, reducing emissions and an all-electric future. Our priorities for modernizing the standards are the need for one national set of requirements and the need to comprehend new technology developments and increased shared and autonomous electric vehicles.
Fiat Chrysler Automobiles NV declined to comment, pointing to a statement that was released Monday by the Alliance of Automobile Manufacturers, which lobbies for major carmakers in Washington. The Auto Alliance said “maintaining a single national program is critical to ensuring that cars remain affordable.”
EPA Administrator Scott Pruitt took a victory lap Tuesday, saying the existing CAFE standards “are inappropriate and should be revised.
“I think the focus in the past has been on making manufacturers in Detroit, making manufacturers in various parts of the country ... make cars that people aren’t going to buy,” Pruitt said during an event at the EPA’s headquarters in Washington. “Our focus should be on making cars that people purchase actually more efficient.”
Pruitt was flanked on Tuesday by lobbyists that represent various parts of the auto industry.
“These standards are not about abstract theory or hopeful forecasts,” said Mitch Bainwol, president and CEO of the Alliance of Automobile Manufacturers. “They’re about what people want to buy.”
Bainwol noted the Obama administration projected in 2012 that gas would cost $3.65 per gallon in 2018. The national average price for a gallon of gas on Tuesday was $2.65, according to AAA.
John Bozzella, president and CEO of the Association of Global Automakers, which represents foreign-based manufacturers, agreed, saying Pruitt’s decision “does not require that we abandon our commitment to ongoing emission reductions, nor should it.”
“We believe the best way to achieve our collective goals is under a single national program that provides an aggressive, but achievable pathway, a variety of compliance tools and factors in the role of customers,” he said at the Tuesday event.
Bozzella acknowledged that automakers will have to continue to increase fuel efficiency to meet higher standards being put in place by other countries: “The world market is shifting to low-carbon transportation and the United States needs to remain competitive.”
Peter Welch, president and CEO of the National Automobile Dealers Association, which represents franchised car dealership owners, said customer research shows that monthly payment is the top concern for most car buyers. “We lose affordability, we lose sales, it’s really as simple as that,” he said. “And if we lose sales, we’ll keep people in older cars that are less safe, that are less fuel-efficient and then we really haven’t achieved our mutual goal to maximize the number of new fuel-efficient cars on the road.”
California politicians have vowed to fight to preserve the Obama administration’s mileage rules, accusing the Trump administration of siding with carmakers and oil companies instead of drivers.
“We’re ready to file suit if needed to protect these critical standards and to fight the Administration’s war on our environment,” California Attorney General Xavier Becerra said in a statement. “California didn’t become the sixth-largest economy in the world by spectating.”
Pruitt was originally scheduled to appear Tuesday at a car dealership in northern Virginia before the event was moved to the EPA’s headquarters. Environmentalists who were planning to protest at the dealership accused him of avoiding them and ducking tough questions about recent controversies that have engulfed his office.
Protestors gathered outside the EPA headquarters instead.
“Fearing he’ll be questioned by the people planning to protest him for his gross abuse of taxpayer funds, or for using the Safe Drinking Water Act to give politically appointed staff raises but not protect communities, or for whether he’ll be fired, or, because he’ll have to sit in D.C. traffic breathing in the car pollution he’s seeking to increase, Scott Pruitt has canceled his celebration of rolling back the clean car standards at a climate denier’s dealership,” Sierra Club spokesman Jonathon Berman said in a email.
The EPA declined to comment on the reason for the change in venue.