Biden to tell U.S. agencies to review fuel efficiency standards, overturning Trump
Detroit — On his first day as president, Joe Biden is set to order U.S. agencies on Wednesday to review fuel efficiency standards, according to the president's transition team.
The executive order, which Biden is expected to sign Wednesday evening, will direct agency heads to review dozens of Trump-era rules that would affect public health and the environment — including fuel economy standards that impact all global automakers selling vehicles in the United States.
Last year, President Donald Trump's administration reduced the required annual fleetwide mpg for 2021-26 vehicles from the original 5% established under the Obama administration to a less-stringent 1.5%. Under the new requirements, automakers were required to achieve a fleetwide average of 40.4 mpg by 2026 down from an average of 46.7 mpg by 2025 that was previously mandated.
Biden is likely to roll back changes made under Trump and institute more stringent fuel economy standards akin to the Obama standard. The new president is expected to be more proactive toward realizing the all-electric future envisioned by major automakers, saying that he wants to see 500,000 charging stations installed to support the transition to EVs.
The administration also is likely to drop the Trump administration's rule arguing that California can't set its own greenhouse gas and mileage standards. Environmental groups sued the former administration over the rule, creating a schism in the industry.
Some automakers — including Fiat Chrysler Automobiles NV (now Stellantis NV), Toyota Motor Corp. and General Motors Co. — sided with Trump. Ford Motor Co., Honda Motor Co. and Volkswagen AG, among others, sided with California and dozen or so other states that typically follow the Golden State's lead.
Both camps argued their strategy was more likely to result in a single standard for the industry. The main driver: to avoid differing regional standards that essentially would require automakers to engineer and build different versions of the same vehicles, driving costs higher and increasing manufacturing complexity.
California is the most progressive state when it comes to fuel emissions standards, Under the 1970s-era Clean Air Act, it has long possessed the ability to enact more stringent rules than the federal standard due to geographic issues with smog and other pollutants. The state wants all new vehicle sales to be electric by 2035.
GM abruptly dropped out of the lawsuit in late November in an acknowledgement that the new administration likely would drop the fight against California, saying its electrification goals align more closely with Biden's aggressive zero emissions plans.
The move took the industry by surprise — especially Toyota and FCA, which had privately agreed with GM to reassess their position after Trump's loss and the prospect of radical change in White House climate policy-making.
In a statement congratulating Biden and Vice President Kamala Harris, GM CEO Mary Barra said: “At General Motors we look forward to working together with the new administration on the issues that unite us. As a nation we are stronger together.”
While the industry has not met federal fuel economy standards since 2015, more stringent regulations are expected to be a challenge. However, automakers and investors agree that electric vehicles are likely to be the future of the industry and have invested billions in the next-generation technology. They've also asked the federal government for regulatory and financial help to get there.
The Alliance for Automotive Innovation, an advocacy group representing major automakers selling vehicles in the U.S., released a statement saying the industry is committed to working with the new administration to reduce emissions and hasten a future rife with electric vehicles.
"We recognize that regulation and policy will help set the terms for that future and that near-term regulatory issues will need to be resolved in a way that benefits the environment, the workforce, and our economy," CEO John Bozzella said. "We congratulate President Biden, Vice President Harris and the incoming administration on this important day and stand ready to work together to address key issues facing our country.”