For Trump, Erasing Stringent Fuel Economy Rules Might Be a Wasted Effort
It would be fair to suggest that government agencies have held the automotive industry by the testicles with both hands for much of the Obama administration. America’s fuel economy and emissions targets are noble, but have cost manufacturers peace of mind and plenty of money. Enter President-elect Donald Trump, who spent a great deal of his campaign promising to repeal some of those standards and change things for the industry.
Are the current targets too lofty? Most automakers would say yes, but it depends on who you’re asking. However, the odds of Trump rolling back efficiency standards in a meaningful way is on par with us returning to the Bronze Age. While not impossible, it’s incredibly difficult to turn back the tide of progress. Even if the 45th President of the United States did manage to dismantle the EPA, abolish Corporate Average Fuel Economy (CAFE) regulations, and convince China to nuke us into the Stone Age, there remains the outside world to consider.
Asia and Europe are pursuing the electric car rather aggressively and it isn’t like the European Union doesn’t have its own fuel economy policies. Even automotive executives are admitting that any changes Trump might make to U.S. gas mileage standards could easily become irrelevant — thanks to emission targets in countries where America’s automakers need to remain competitive.
“Let’s not forget that this is a global issue, and we develop engines for the global market,” Nissan CEO Carlos Ghosn told The Detroit News at this year’s North American International Auto Show.
“That means we have to develop for the U.S. but also for something that will serve us in Europe, will serve us in China, will serve us in Japan. So what is really driving alternative energy is a global trend, a global trend independent of what happens locally in big markets. Global trend is driving higher levels of fuel efficiency no matter what happens in the U.S.”
It also must be said that the wheels are already in motion. BEVs, hybrid solutions, and new super-efficient ICEs are all coming down the pipeline because automakers, anticipating a market shift, backed those projects.
While General Motors CEO Mary Barra claims she would like to see economy and emission standards streamlined to help vehicle affordability, she also said GM is committed to environmental stewardship on a global scale. Barra claimed that the possibility of Trump bulldozing EPA regulations won’t affect her company’s focus toward enhanced economy and electrification.
“From a portfolio perspective, when you look at the Bolt EV and along with the other hybrid vehicles that we have, the investment in fuel cells, we see the Bolt EV and building on the learnings of the Volt to be the platform that we’re going to launch off of to have a much broader electrification portfolio as we move forward,” she told reporters at the NAIAS.
Let’s also not forget that the Environmental Protection Agency and the U.S. Department of Transportation have done everything in their power to lock-in the 2025 mileage rules before the new administration can take office. And, even if Trump does change the nature of the game, green states — like California — would undoubtedly try and enforce their own ordinances to combat any federal changes.
However, consumers are enjoying low fuel prices and the U.S. has a surging fondness for less-efficient vehicles. Ford CEO Mark Fields is concerned that CAFE standards don’t accurately reflect American tastes and that electric vehicles won’t surpass their niche status. “You can’t meet these goals without consumer participation,” Fields said.
That’s a fair point to make and possibly the only thing that could handicap the march toward an industry average of 54.5 mpg. Trump can impose import tariffs and strong-arm corporate investments from auto companies but, without the help of millions of individuals shopping for new cars in North America, Europe, and China, he’s not going to shrink the gas mileage rating on any window stickers.
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