A group of 17 automakers (not including Fiat Chrysler) on Thursday sent a letter to President Trump arguing that the best path for preserving industry jobs and keeping new vehicles affordable is a single federal rule regulating vehicle mileage requirements and emissions. The industry is practically begging the president to reconsider his plan to freeze the mileage rating at 37 mpg until 2026, well below the 2025 target of 47 mpg requirement set by the Obama administration and agreed to by the automakers back in 2012.
It’s not because the 2025 target is out of reach. The Trump administration has proposed revoking California’s right under the Clean Air Act to set emissions and mileage requirements that are higher than the federal standard. California has made it abundantly clear that it has no intention either of giving up that right nor of lowering its requirements.
On May 1 of this year, California and 17 other states filed a lawsuit against the U.S. Environmental Protection Agency (EPA) over the Trump administration’s proposed standards rollback. More than a third of all new cars sold in the United States every year are sold in those states.
If one standard is bad, two (or more) is positively awful. Saying that regulation that “works best” for the industry, communities and consumers is “one national standard that is practical, achievable, and consistent,” the automakers told the president that a single regulation, “including California,” is the preferred path because it provides “regulatory certainty” and gives the industry a framework for investment and some insulation from further litigation and encouraged further discussion between the administration and California.
Mary Nichols, who chairs the California Air Resources Board (CARB), remarked last month that the state may consider an outright ban on internal combustion engines. That got everyone’s attention, even though it is unlikely ever to happen.
The Trump administration’s plan to lower mileage and emissions requirements has yet to be submitted to the Office of Management and Budget for review, a necessary step before the final EPA regulation can be adopted. According to a report in Automotive News, the EPA and the National Highway Traffic Safety Administration estimate that the Trump proposal would lift U.S. crude oil consumption by 500,000 barrels a day and reduce automakers’ compliance costs by more than $300 billion.
Are automakers really willing to give up $300 billion in exchange for a single regulation that covers the entire country? Automakers never have seriously argued that they can’t meet the 47 mpg target they agreed to during the Obama administration. They are surely aware by now that sales of vehicles with internal combustion engines are flattening and will begin falling in the next few years. The choice is clear for carmakers that stand to lose a lot more than $300 billion if they fail to develop vehicles that people want to buy five or 10 years from now.