Automakers stick to current rules
DETROIT — For all the drama surrounding the Trump administration’s attempt to undo Obama-era fuel economy requirements, automakers are likely to stick to them until they get some answers.
The administration on Thursday unveiled plans to freeze the requirements at 2020 levels through 2026, after which they will be revisited. That means the fleet of new vehicles would have to average about 30 miles per gallon in real-world driving from 2020 through the next six years. The previous fuel standards under President Barack Obama required about 37 mpg by 2025.
But much remains in flux. The Trump administration likely will challenge California’s ability to set its own stricter standards that now match the ones under Obama, and depending on who wins, the U.S. could wind up with two gas mileage standards. It could take years for courts to settle the dispute, or both sides could negotiate one standard. There’s also the looming 2020 presidential election, which could upend the requirements again if a Democrat takes over.
In the meantime, automakers aren’t sure what requirements they will have to meet in 2021, so most are proceeding as if the Obama-era requirements won’t change. They’re continuing to develop more efficient vehicles including electrics and hybrids.
“We’d like to get clarity as soon as we can,” General Motors President Dan Ammann said Friday on the sidelines of a cybersecurity conference in Detroit. “We’d be very much behind one national standard that we can work to plan, to deploy capital against.”
The government will take comments on the proposal to freeze requirements and some other options, including leaving the previous fuel standards in place. A decision is expected by early next year.
Thirteen states now follow California’s requirements. If they force two standards, that will drive the automakers’ engineering and manufacturing costs to build two versions of each vehicle.
“Manufacturers really have to assume that the California regulations will stand,” said Navigant Research analyst Sam Abuelsamid.
The Trump administration could freeze standards for the rest of the nation while the court fight rages. If that happens, Abuelsamid sees automakers marketing trucks and SUVs heavily in states that don’t follow California.
Even if the federal government ultimately wins, the U.S. will still get most of the same vehicles as the rest of the world because automakers have to comply with standards that already are stricter in China, Japan and the European Union, analysts say. Companies want to sell the same vehicle in as many places as possible to spread out development costs and make more money.
