Carmakers say latest fuel-economy grade-card shows need for mpg deal
Washington — Automakers say the latest grade-card for meeting federal fuel-economy standards shows the need for the White House and California to compromise on more-attainable mileage rules.
The U.S. auto industry achieved a record average of 24.9 miles-per-gallon in the 2017 model year, the Environmental Protection Agency said Wednesday. But carmakers fell short of marks set by the Obama administration, and most manufacturers only remained in compliance with the standards by cashing in credits from previous model years.
Automakers were required by the Obama-era mileage rules to achieve a fleetwide average of 29.3 miles-per-gallon in "real world" testing for 2017. Not only did they fail to meet that threshold for last year, but the EPA said preliminary data shows automakers are likely hit an industry-wide average of only 25.4 miles per-gallon for 2018, which would fall short of the 30.6 miles-per-gallon milepost.
Honda led all automakers for 2017 with an average of 29.4 miles per gallon for its fleet, followed by Mazda with an average of 29 miles per gallon and Hyundai with an average of 28.6 miles per gallon.
Detroit manufacturers lagged behind foreign-owned competition in meeting the stringent fuel economy standards now under review by the Trump administration.
Ford Motor Co., General Motors Co. and Fiat Chrysler Automobiles U.S. LLC ranked 11th, 12th and 13th respectively among 13 manufacturers who were measured. Ford and GM averaged 22.9 miles per gallon, while Fiat Chrysler averaged 21.2.
Fiat Chrysler attributed its last-place performance to changing consumer preferences that have shifted more heavily toward SUVs and pickups since the Corporate Average Fuel Economy (CAFE) standards were finalized in 2012. The standards average the fuel-economy of every car and truck sold by a carmaker, so if a carmakers sells large numbers of trucks or SUVs, it drags down the overall fleet performance.
"Today's retail landscape differs markedly from the vision initially held by regulators and industry," Fiat Chrysler said in a statement. "Gasoline prices remain low, consumer demand has shifted toward utility vehicles, and alternative powertrain technologies have failed to attract buyers. The impact of these trends must be factored into fuel economy targets that support continuous improvement, while allowing consumers to choose vehicles and technologies at prices they can afford."
A Ford spokesperson said the company remained committed to improving fuel economy of all of its vehicles, but also pointed to customer preference for trucks and SUVs.
GM pointed to a statement released by the Alliance for Automobile Manufacturers, which lobbies for most major carmakers and has pushed for an easing of the Obama-era rules.
"Market conditions are a critical reality, since our compliance with federal standards is based on sales and affordability," the auto alliance said. It said the EPA and the National Highway Traffic Safety Administration should consider the findings of the latest report as they finalize fuel economy and greenhouse gas regulations.
The mileage rules for model years 2021 to 2025 are under review by the Trump administration and are at the center of a high-profile fight with California, which has had the right to set its own emissions standards under the Clean Air Act since 1963. The Trump administration has proposed freezing CAFE standards from the 2021 to 2025 model years at 2020 levels. That means they would only have to hit a fleet-wide average of 33.4 miles per gallon in real-world driving — not the 43.6 miles per gallon currently required for 2025.
California has sued over the Trump administration's effort to roll back the rules. The White House recently broke off negotiations with leaders in the state about a potential compromise.
Thirteen states and Washington, D.C., have adopted California’s more-stringent requirements, and nine states have replicated the state's zero-emission vehicle program, which calls for the state to have 1.5 million zero-emission vehicles by 2025. Automakers have clamored for a deal between Washington and California that would create one national standard.
U.S. Rep. Debbie Dingell, D-Dearborn, a member of the U.S. House Energy and Commerce Committee and a former GM executive, said she will try to convince the Trump administration and California to get back to the negotiating table.
"With the fuel-economy standards, we've saved energy and made better cars," she said.
Dingell said she was confident in the fuel-economy standards, despite revelations that have hit companies like Volkswagen and Fiat Chrysler over cheating on diesel emissions tests. Fiat Chrysler agreed to pay $800 million in a recent settlement with the EPA and U.S. Department of Justice after its diesel engines were found to emit far more pollutants than allowed. Ford recently preemptively reported potential problems with computer modeling that may have skewed its own internal emission testing.
"The companies have been working with good intent," Dingell said.
Luke Tonachel, director of the clean vehicles and fuels project at the Natural Resources Defense Council, said the EPA's figures show the Obama-era CAFE standards are reducing pollution.
"The rollback being proposed is unjustified and frankly illegal," he said, noting that California has had the right to set its own emission standards since the Clean Air Act was passed in the 1960s.
Carla Bailo, president and CEO of the Center for Automotive Research, said automakers are under pressure worldwide to reduce pollutants, noting that China and Europe are moving faster toward vehicle electrification than the U.S. is.
"If we stuck with the Obama standard, automakers need significant adoption of electric vehicles," she said. "For various reasons, consumers aren't buying those."
Bailo said research shows car buyers expect automakers to continue improving fuel economy, but not enough to turn from popular SUVs and pickups to fuel-efficient electric cars.
"It's one of the things that's just expected," she said. "Every time they go in to buy a new car, they expect the fuel economy to get better. Are they willing to pay for it? That's a different story."