Automakers Hope to End Uncertainty in Fight Over California Fuel Economy Standards

By Ilene Schneider
Ilene Schneider
Ilene Schneider
November 8, 2019 Updated: November 8, 2019

In the fight over California’s ability to set its own standards for greenhouse gas emissions and fuel economy, the Trump administration and the state of California have each teamed up with a group of automakers. However, the split may delay the finalization of a clear set of standards for car companies.

In July of this year, Ford, BMW, Honda, and Volkswagen came to an agreement with California to make gas mileage and greenhouse gas emissions standards tougher. They signed an agreement with the California Air Resources Board, the state’s air pollution regulatory authority.

Then California and other states sued the Trump administration in September for planning to revoke the state’s authority to set its own requirements. The administration has recently been supported in the lawsuit by the Association of Global Automakers and companies such as General Motors, Fiat Chrysler, Toyota, Nissan, Hyundai, Kia, Isuzu, Maserati, McLaren, Aston-Martin, and Ferrari, which created the Coalition for Sustainable Automotive Regulation.

“We did not ask for, nor did we want, these questions to be decided in the courts, but we hope this pathway leads to a solution amenable to all parties,” said John Bozzella, president and CEO of the Association of Global Automakers, in a statement. “With our industry facing the possibility of multiple, overlapping and inconsistent standards that drive up costs and penalize consumers, we had an obligation to intervene.”

The Trump administration has proposed freezing fuel efficiency standards at 2021 levels until 2025. Under Obama administration standards, new vehicles would have to achieve 30 mpg in real-world driving conditions by 2021, and 36 mpg in 2025. Current standards demand a fuel efficiency of 26 mpg.

However, the administration may now be considering a yearly 1.5 percent increase in efficiency standards, according to the Wall Street Journal, allowing automakers more time to adjust than the Obama-era standard of 5 percent.

“The Trump Administration is focusing on finalizing the SAFE rule which will deliver one national standard to the American auto market,” said Michael Abboud, an EPA spokesperson, told Vox.

Supporters of the Trump administration’s plan believe that more strict rules like the ones in California will increase the cost of vehicles for residents. They also argue that a universal standard will help reduce emissions across the country.

“The certainty of one national program, with reasonable, achievable standards, is the surest way to reduce emissions in the timeliest manner,” Bozzella told the Associated Press. “With our industry facing the possibility of multiple, overlapping and inconsistent standards that drive up costs and penalize consumers, we had an obligation to intervene. There’s a middle ground that supports year over year increases in fuel economy.”

Opponents accused the Trump administration and automakers of harming environmental efforts.

Senator Tom Carper (D-Delaware), who is on the Senate Environment and Public Works Committee, said in a statement, “Instead of choosing the responsible path forged by four automakers and the state of California, one that will move us toward the cleaner, alternative fuel vehicles of the future, these companies have chosen to head down a dead-end road.”

After the passage of the Clean Air Act in 1970, California was given a waiver granting the state the authority to set its own more stringent emissions standards.

In 2008, California’s request for a waiver to regulate greenhouse gases was denied, and the state requested that the EPA reconsider that decision. During President Obama’s administration in 2009, the federal government approved California’s right to set its own emissions standards.

California’s 35 million registered vehicles are the most of any state, and many other states follow its lead on fuel economy standards.

The Trump administration says that freezing the fuel economy standards would lower the average sticker price of new vehicles by up to $2,700 by 2025. However, environmental groups say the numbers do not include money that consumers would save at the gas pump if cars were to get better mileage.

An August analysis from Consumer Reports found that a 2026 vehicle owner would pay $3,300 more for gasoline during the life of a vehicle if the standards remain at 2021 levels.

The Trump administration also argues that the freeze would render the roads safer by making newer, safer cars more affordable. A final proposal could be issued by the end of 2019.

While automakers are uncertain about the outcome of the fuel emissions debate, California keeps challenging the federal government. A spokesperson for California Attorney General Xavier Becerra’s office told Reuters, “The courts have upheld our authority to set standards before and we’re hopeful they will again.”

Ilene Schneider
Ilene Schneider