Howes: Automakers playing it two ways on new fuel rules

Daniel Howes
The Detroit News

Detroit’s automakers are thrilled with President Donald Trump’s move to likely ease fuel economy standards as soon as 2022. Don’t expect them to gloat publicly.

It would be dumb, considering all three are doubling-down on the U.S. market’s unmistakable shift to pickups and SUVs. None want to be seen mocking the environmental credentials they’re trying to build through expanded offerings of gas-electric hybrids, electric powertrains and corporate visions of a zero-emissions world.

Yes, they’re trying to have it both ways, thanks to unmistakably divergent priorities. Consumers keep deserting traditional cars, hybrids and electric vehicles for trucks and SUVs as steep fuel-economy targets reached in the wake of the Great Recession arc higher than the market appears willing to follow.

Enter the fuel-economy conundrum: automakers need to maximize their revenue and profit selling as many high-margin trucks and SUVs as they can to finance a future they think will be more electrified, shared and autonomous than today’s market reflects. That can make for some ironic disconnects.

A planned announcement this week of the expected policy change by the Environmental Protection Agency administrator, Scott Pruitt, at a Northern Virginia Chevrolet dealer was scrapped when fellow Chevy dealers pushed back, The New York Times reported. Translation: don’t make Chevy, maker of the plug-in battery electric Bolt, the Trump administration’s poster child for easier-to-attain fuel-economy rules.

Ford Motor Co.’s top two executives — Executive Chairman Bill Ford Jr. and CEO Jim Hackett — took to a blog to say the Dearborn automaker is not seeking a rollback in Obama-era rules credited with expanding the collective fleet of electric vehicles that comparatively few consumers are interested in buying.

And General Motors Co. CEO Mary Barra used separate meetings last month with Pruitt and with the chair of California’s powerful Air Resources Board, Mary D. Nichols, to reiterate GM’s desire for one national set of emissions and fuel-economy standards.

GM officially says it’s not seeking relief from the existing fuel-economy targets for 2022 through 2025. But the company is urging adoption of modernized rules that would account for shared electric vehicles, shared self-driving vehicles and ride-sharing fleets.

“We support increasing clean car standards through 2025 and are not asking for a rollback,” Bill Ford and Hackett wrote, echoing rival GM. “We want one set of standards nationally, along with additional flexibility to help us provide more affordable options for our customers. We believe that working together with EPA, (the National Highway Traffic Safety Administration) and California, we can deliver on this standard.”

Easier said than done, given California’s exemption under the 1970 Clean Air Act to set its own emissions targets. State officials already have signaled a readiness to battle the Trump EPA in federal court, protracted litigation that risks pitting automakers against the markets and interest groups they covet.

Still, Detroit and its foreign rivals operating in the United States see a Trump reset of the Obama-imposed fuel-economy standards as their best chance to avoid building one set of vehicles for California and the dozen states that follow its rules and another for the rest of the country.

Don’t hold your breath, Detroit. Pruitt’s tenure leading the EPA looks rockier with each passing day, but his pugnacious posture toward California’s exemption from federal fuel-economy rules suggests the Trump administration is spoiling for a fight with the nation’s most populous state — and, by extension, most of the northeast.

That’s a sizable and influential chunk of the U.S. market. Those are the same places GM is trying to woo with its Bolt electric and New York-based Cadillac brand, and Ford is angling for with its higher profile in Silicon Valley. The risk is that Detroit finds itself allied with a Trump EPA facing off with California and its like-minded states.

“This is the flashpoint of the collision course with the Trump administration,” said U.S. Rep. Debbie Dingell, the Dearborn Democrat and former GM executive. “Everybody stays at the table, everybody does well. Nobody stays at the table, nobody does well.”

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Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him at 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.