U.S. Automakers Push for Deal on Fuel Efficiency Rules

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January 16, 2019

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by David Shepardson (Reuters) Executives at the major U.S. automakers are pressing the Trump administration and California to agree on standards for fuel efficiency and carbon emissions through 2025, as risks increase that a deadline for setting national standards will pass without a deal.

Automakers are already entering the time frame when decisions should be made about what engines and fuel-saving technology, such as hybrids or fully electric cars, will be in use in 2021 and beyond, executives said.

In August, the Trump administration proposed freezing fuel efficiency requirements at 2020 levels through 2025 and stripping California of the ability to impose stricter rules. The administration may also eliminate compliance credits that automakers get for making electric vehicles.

Trump’s proposed freeze would result in 500,000 barrels per day more oil consumption by the 2030s.

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The administration is supposed to finalize the new rules by the end of March in order for the softer requirements to take effect by the 2021 model year, but some automakers and officials question if it will meet that deadline in the wake of the partial government shutdown.

Most automakers oppose freezing the requirements, but also want relief from Obama-era standards that called for a roughly 5 percent annual reduction in carbon emissions – targets that translate to fuel efficiency requirements for various classes of vehicles.

“Pick the middle. Pick 2.5 percent and get on with life,” Jim Lentz, chief executive officer of Toyota Motor Corp’s North America subsidiary, told Reuters at the Detroit auto show this week.

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Fiat Chrysler, Ford and GM have all discontinued or planned to drop small and medium-sized sedans from their lineups to focus on trucks and SUVs.

But Asian automakers that have more efficient fleets are also seeking a middle ground.

Henio Arcangeli, a senior vice president at the U.S. unit of Honda Motor Co Ltd, said without a national deal “the consumer’s going to lose.” READ MORE

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