Trump thanks GM, Fiat Chrysler for siding with him in Calif. mpg fight

Keith Laing
The Detroit News

Washington — President Donald Trump tweeted thanks to General Motors Co., Fiat Chrysler Automobiles NV and Toyota Motor Corp. for siding with him in a legal fight with California over gas mileage rules.

"Thank you @GM, @FiatChrysler_NA, @Toyota, and @GloblAutomkrs for standing with us for Better, Cheaper, Safer Cars for Americans," Trump tweeted Wednesday afternoon. "California has treated the Auto Industry very poorly for many years, harming Workers and Consumers. We are fixing this problem!"

The automakers, together with the Association of Global Automakers, which lobbies for foreign-owned carmakers in Washington, said Monday they plan to intervene in a lawsuit between California and the federal government to argue in favor of the Trump administration's position that Washington should create one set of gas mileage rules for all the nation's cars. 

Ford is on one side of the fuel-economy dispute between California and the White House, and GM and Fiat Chrysler are on the other, as carmakers plead for regulatory certainty.

Since the earliest days of Trump's presidency, the federal government and California have been at odds over gas-mileage rules in a fight that is dividing the auto industry. California is the nation's largest state, and accounts for 12% of the U.S. auto market. Thirteen states and Washington, D.C., have adopted California’s gas mileage rules.

The Trump administration has moved to relax stringent gas mileage rules that were enacted by the Obama administration that would have required automakers to produce car fleets that averaged over 50 miles per gallon by 2025. Trump has proposed a freeze in the mandate after 2020, when their lineups must average 39 miles per gallon. California, which helped craft the Obama-era rules, has sued over the rollback and has promised to also sue over the revocation of its right to set its own rules. 

California in July reached an agreement with Ford, Volkswagen, Honda and BMW to voluntarily increase the average fuel economy of their fleets from 2021 levels by 3.7% per year, reaching an average of nearly 50 mpg by 2026. The U.S. Department of Justice has launched an antitrust investigation into that agreement.

Carmakers note the U.S. auto industry achieved a record average of 24.9 miles-per-gallon in the 2017 model year, according to most recent figures released by the U.S. Environmental Protection Agency. But automakers 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.

Carmakers attribute the lagging fuel economy performance to changing consumer preferences that have shifted 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.

GM, FCA and Toyota have declined to comment on the mpg fight beyond their joint statement announcing the intervention.


Twitter: @Keith_Laing