Automakers push for mpg deal between Trump and California
Washington — Automakers are encouraging the Trump administration and California to settle their differences long enough for a deal clearing the way for a nationwide set of gas-mileage rules.
But even as carmakers remain in the dark about exactly what mileage standards they will be expected to comply with as soon as the 2021 model year, there is little evidence either side is in a mood to compromise.
California Attorney General Xavier Becerra has boasted about suing the Trump administration 46 times since 2017, most recently over the president’s declaration of a national emergency to fund a wall on the Mexican border.
Trump has derided California as wasteful liberal bastion, pointing out problems with a beleaguered proposed high-speed rail there and demanding the refund of $2.5 billion in federal money already awarded to the project. The president has also threatened to cut off funding to help the state fight wildfires.
Against that backdrop, the Trump administration confirmed last week it has stopped negotiating with California on mileage rules that would replace regulations enacted by the Obama administration, depriving automakers of a quick settlement and a national set of rules. The administration also is moving to revoke a longstanding waiver in the Clean Air Act that allows California and other states to set their own stricter auto emissions standards.
Thirteen states and Washington, D.C., have adopted California’s mileage rules, and nine states have also replicated the state's zero-emission vehicle program, which calls for the state to have 1.5 million zero-emission vehicles by 2025.
The Alliance of Automobile Manufacturers, which lobbies for major carmakers, is encouraging both sides to go back to the table and reach a deal to prevent a lengthy court fight, said Gloria Bergquist, the group's vice president of communications and public affairs.
"At the end of the day, both California and the federal government have a stake in getting this right and having achievable standards," she said. "I call where we are now basically a treadmill policy. We keep going over where we are over and over. We believe both sides are going to see the merits of coming together."
Automakers cheered initially when the president re-opened a review of stringent gas-mileage rules enacted by the Obama administration that would have required fleets averaging more than 50 miles per gallon by 2025. But Trump went further than carmakers wanted by proposing to freeze the mandate after 2020, when their lineups must average 39 miles per gallon.
Carmakers are "scared to death" of a lengthy legal standoff between the Trump administration and California, said Brett Smith, director of propulsion technologies and energy infrastructure at the Center for Automotive Research.
"The big challenge for (carmakers) is consistency and long-term planning," Smith said. "The way this is playing out, there's no expectation of consistency."
Smith said automakers are a tough spot politically because they know most drivers support increasing fuel-efficiency standards at least in the abstract. But they also know drivers want big SUVs and pickups.
Almost two-thirds of drivers said fuel economy was an important factor in their decision to purchase a car, second only to safety, according to the 2018 Global Consumer Survey conducted by research and analysis company Statista. But professional services company Deloitte's 2018 Global Automotive Consumer Study showed two-thirds of potential buyers expected their next vehicle to be gasoline- or diesel-powered.
Smith said a move by Trump to revoke the legal waiver that allows California to set its own emission standards would end up with the two sides "in court forever."
"I can't imagine California saying 'OK President Trump, we agree with you,'" he said. "There are lot of things that are important to the Democratic Party in California and the citizens of California, and this is one of them."
Smith said the fact that the mileage standards are closely associated with Obama has given his successor just as much determination to dig in.
"President Obama made it a political football and Trump is clearly punting that football," he said, noting that conservatives resisted the Obama administration's efforts to promote electric cars as part of its strategy to lower auto emissions. "It's really hard for the current administration to lose on this. Both sides are very entrenched on this for different reasons."
California leaders have made clear they see themselves as a bulwark against Trump's conservative agenda.
"The president's overreach has been extensive on any number of occasions, and we've shot them down in court on any number of occasions, because they have gone beyond what the law permits the executive to do," Attorney General Becerra said in a Feb. 15 press conference announcing California's lawsuit against the Trump administration over the national emergency declaration for the border wall.
"If I were a baseball player, our batting average would be phenomenal," Becerra continued. "It'd be out of this world. I'd be a free agent making some good money."
Michelle Krebs, senior analyst for Autotrader, said the gulf between the White House and California on mpg rules makes product development, sales and marketing "extremely challenging" for automakers.
"What’s evolving is the automakers’ worst nightmare," she said. "Automakers desperately want a single, national standard. That’s why they signed on to the more stringent Obama standards.
"Now it appears the gap will widen between California and the other states that follow California’s lead as they move forward with the Obama standards, while the Trump administration may well roll back standards."