Top Automakers Warn Trump about Plan to Rollback Emissions Standards

by John Bowden (The Hill) Many top-selling automakers around the world sent a letter to President Trump on Thursday urging the Trump administration to scrap plans to roll back fuel efficiency standards set during the Obama administration.

In a letter signed by 17 major automakers including General Motors, Ford and Toyota, the companies wrote that a rule cutting back on fuel efficiency standards imposed under the Obama administration would essentially split the nation's auto market in half, as companies would be forced to deal with competing efficiency standards imposed by the federal government and some states that have imposed their own standards, The New York Times reported.

California and more than a dozen other states have adopted their own fuel efficiency standards and are likely to sue the Trump administration to block the rule if it is announced, according to the Times.

The Trump administration is reportedly planning to unveil the rule rolling back efficiency standards in the coming weeks, freezing mileage standards for cars around 37 miles per gallon and scrapping plans to raise those targets to 54.5 miles per gallon by 2025. READ MORE

Excerpt from New York Times: But they also fear the costs of the uncertainty and regulatory headaches that potentially await them should Mr. Trump’s rollback go through as planned.

For example, automakers would have to demonstrate that the average mileage of all the cars they sell in California is much higher than in states like Utah, where the new Trump standard of about 37 miles per gallon would be in effect.

But because Americans increasingly prefer SUVs over thriftier vehicles, manufacturers might have to significantly cut prices on electric vehicles in the high-mileage states, a potentially money-losing proposition, while raising the prices of gas guzzlers. At the same time, auto lots in low-mileage states might hold a completely different mix of vehicles at different prices.

If car buyers simply cross state lines to buy gas-guzzlers and bring them into the cleaner-standard states, it could create more regulatory headaches for the companies, which could also be subject to fines from high-mileage states if they fail to comply.

In asking Mr. Trump to revise his proposal, the automakers effectively withdrew their support for the current plan and asked the president to make a deal with California, a state that he appears to relish antagonizing.

While two of the nation’s Big Three companies signed the letter, the third, Fiat Chrysler, did not. Other automakers who signed the letter include BMW, Honda, Mazda, Nissan, Subaru and Volkswagen. READ MORE

Excerpt from Politico's Morning Energy: AUTO RULE COMING 'EARLY SUMMER,' EPA SAYS: As we settle into mid-June, observers say it's becoming clearer that we may still be months away from a final auto emissions rule from EPA and the NHTSA. Wheeler had previously said the goal was March, but the government shutdown and other factors eventually pushed that back.

An EPA spokesman told ME only to expect the rule in "early summer." ME notes that EPA traditionally uses seasonal terms like that in a meteorological sense rather than the cultural — meaning that while you may have already spent a weekend in Rehoboth, "summer" doesn't start for EPA until June 21.

More on timing: The final rule has yet to go to OMB, where major rulemakings usually take at least 60 days, meaning even if the rule went to OMB today, it could take until mid-August to be finalized. Add in a few months to sue and brief out a fight over a judicial stay and automakers — who last week urged Trump to issue a more moderate rollback — could be looking at significant uncertainty through the fall about the standard for model year 2021 vehicles scheduled to hit dealerships next summer. READ MORE