- Pablo Martinez Monsivais/AP
The US auto industry is happy with Donald Trump.
Thus far, the new President – who roiled automakers over outsourcing and hiring during the election campaign – has suggested that he’ll deliver the corporate tax cuts and regulatory changes that Ford, GM, and Fiat Chrysler Automobiles have been craving.
This big regulatory move could happen soon, according to the New York Times:
The Trump administration is expected to begin rolling back stringent federal regulations on vehicle pollution that contributes to global warming, according to people familiar with the matter, essentially marking a U-turn to efforts to force the American auto industry to produce more electric cars.
The announcement – which is expected as soon as Tuesday and will be made jointly by the Environmental Protection Agency administrator, Scott Pruitt, and the transportation secretary, Elaine L. Chao – will immediately start to undo one of former President Barack Obama’s most significant environmental legacies.
At the end of 2016, the Obama EPA locked in automaker targets under the Corporate Average Fuel Economy (CAFE) standards. Automakers will have to achieve a fleet average of 54.5 mpg by 2025.
The automakers make their case
The industry has actually made good progress on this goal, which led the government to commit to the standard. But automakers weren’t pleased with what some termed a “short circuiting” of the review process. Ford CEO Mark Fields was particularly vocal. Fields said that it was important for the government to consider automakers’ data and have an open discussion about whether it makes sense to stick to the CAFE timetable. Specifically, Fields wants the government to take into account the profitable surge in SUV and pickup truck sales, which have led the US market to record highs.
Sales of gas-electric hybrid vehicles, meanwhile, have been declining. And electric cars have largely disappointed, with sales only amounting to 1% on the global market. Carmakers haven’t abandoned these vehicles, but from their perspective, they would prefer to modify the CAFE timetable so that they can sell as many trucks and SUVs as possible before the arrival of a downturn.
The desire to see the government resume the debate goes beyond the Detroit Big Three. The Auto Alliance – a lobbying group consisting of the Detroit carmakers and nine foreign manufacturers selling vehicles in the US – sent a letter to the EPA last month requested that the midterm review of the regulations be reopened. The Alliance’s argument centered on the decision to pledge agreement on the higher standards, with the understanding that a review would be required because the benchmarks had been set so far in the future.
Beyond the national issues, automakers have also said that there should be a single standard for the entire US. Currently, California has a waiver that allows it to set it own rules. The Trump administration may seek to revoke it.