Transportation

Memo To The Auto Industry: Time To Join California And Leaders Opposing Trump Clean Cars Rollback


When four auto companies representing 30% of the U.S. car market announced they reached a clean cars compromise with California regulators after months of negotiations, they may have found the light at the end of a tortuous tunnel that began more than two years ago. Now that Ford, Honda, VW, and BMW are accelerating toward a cleaner future, it’s time for the other automakers to join this agreement .

Miami traffic on Route 95 North

Wikimedia user B137 under the Creative Commons Attribution-Share Alike 4.0 International license.

Early in 2017, the Trump Administration announced it would begin efforts to roll back the Obama-era clean car program, known as the 2025 Light Duty Vehicle Greenhouse Gas/Fuel Economy Standards. At the time, Mitch Bainwol, president of the automotive lobby group, Auto Alliance, praised the move and claimed the potential changes meant “analysis rather than politics” would determine future regulations.

Fast forward a little over two years later, and automakers have grown less sanguine about the administration’s new Safer Affordable Fuel-Efficient (SAFE) vehicles rule, expected to be released in fall 2019. In fact, they seemed outright alarmed by the scope of the planned rollback, which would freeze auto efficiency standards at around 37 miles per gallon (mpg), dramatically scale back future fuel economy, and put American companies behind international competitors in the global race to develop more efficient and technologically advanced vehicles.

In June, 17 of those auto companies – including Ford, General Motors, and Toyota – sent a letter to the White House warning the Trump administration’s plan would threaten their profits and create “untenable” market instability. But they are hardly the only ones concerned about the administration’s wrecking ball approach to one of the key Obama-era environmental achievements.

In 2018, 10 Michigan cities claimed the rollback “will put Michigan manufacturing at risk.” Last July, a group of 24 governors– including three Republicans – also urged the president to abandon his plan. And a group of 17 states led by California have declared their intention to sue the federal government to prevent the rollback – a move that would ensure three to four years of court time and years of uncertainty. Even the United Auto Workers have joined calls resisting the roll back.

In a June 2019 letter to President Trump, the Motor Vehicle Manufacturer’s association (MEMA) also opposed the rollback. Since the fuel efficiency and greenhouse gas (GHG) rules inception in 2012, suppliers have received $3.72 billion in new investments. In its comments, MEMA explained how the proposed roll backs could cost the sector 500,000 jobs.

So if states, cities, and the auto industry oppose the Trump administration’s clean cars rollback, who is for it? At this point, it’s clear the only winners would be major oil companies worried about their profit margins with more fuel-efficient cars .

The new California agreement would take industry fuel efficiency to around 50 mpg in 2026, vs. the Obama era rules which targeted 51 mpg in 2025, significantly more than the SAFE rule’s proposed 37 mpg. It would eliminate costly industry uncertainty and align automakers with the very certain direction the rest of the world has moved toward since Trump’s announcement in 2017: much more stringent fuel economy and greenhouse gas targets.

U.S. President Donald Trump, center, speaks during a meeting with bipartisan members of Congress on trade in the Cabinet Room of the White House in Washington, D.C., U.S., on Tuesday, Feb. 13, 2018. Republican lawmakers cautioned Trump in a White House meeting against levying tariffs on steel and aluminum imports, warning that it would raise prices of the metals and potentially cost the U.S. jobs in other industries including car manufacturing. Photographer: Yuri Gripas/Bloomberg

Photographer: Yuri Gripas/Bloomberg

Building cars requires economies of scale, which becomes much harder for auto companies to achieve if the United States lags so far behind other countries. Instability created by Trump’s extreme rollback, the resulting lawsuits brought by states, and the direction other countries are moving in will make it very difficult for automakers to know how to invest for this future. Should they be designing cars of the past or heavily investing in zero-emission electric vehicles (EVs)?

Starting next year, European vehicles have to effectively achieve around 57 mpg. And, the EU is in the process of finalizing a new set of rules that target would reduce 2030 carbon dioxide emissions by almost 40% from 2021 levels with a target of 90 mpg. Estimates suggest that around 35% of the vehicles sold by an automaker in the EU in 2030 would have to be EVs.

In China, GM’s largest auto market, the Ministry of Industry and Information Technology (MIIT) released its 2025 passenger car fuel consumption targets, calling for an average of 57 mpg. That would suggest around 20% of new vehicles sold in 2025 would have to be electric. Japan and India also have also recently announced stricter standards. 

Electric vehicle at charging station

Energy Innovation

Automakers have responded to international pressures with massive investments in clean EVs. Cumulatively, automakers are investing $300 billion to develop batteries and EVs over the next five to ten years. American automakers, including Ford, GM, FiatChrysler and Tesla, are among those global companies investing in EV technologies, but they are far from the largest investors. In fact, VW and Daimler are investing more than three times as much in EVs than all three of the U.S. car companies, combined.

The only viable choice is for other key players investing in clean cars, like GM, Toyota, Hyundai and Daimler, to demonstrate the courage and join with Ford, Honda, VW, and BMW in the California agreement to preserve a single, stable national program for the industry – and one that is closer to international standards.

Globally, the goal posts for fuel economy and GHG emissions have moved significantly in the last two years. Automakers who play by the old rules are headed for defeat.





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