NADA, automakers applaud Trumps promise to review CAFE rule

NADA, automakers applaud Trumpês promise to review CAFE rule

NADA, the Auto Alliance and the Detroit-based automakers praised President Trumpês decision to review the fuel economy standards approved by the Obama administration in its waning days. For now, it looks as if automakers will have a reprieve. But there are several caveats.

The biggest one is that California can write its own stricter emissions rules. And at least a dozen states, including Maryland, DC and several Northeastern states, have agreed to follow them. More on that later.

First, hereês what happened last week. Trump flew to Michigan to announce that he would reopen the review of fuel economy standards. In 2012, automakers were anxious for a single national standard, and they agreed to one requiring an industry fleet average of 54.5 mpg by 2025. The standard called for a midterm review that the Environmental Protection Agency (EPA), National Highway Traffic Safety Administration (NHTSA) and California Air Resources Board (CARB) would conduct in consultation with the auto industry.

Those three agencies issued a draft report last May saying that automakers were on target to meet the requirements, though the real world figures might be closer to 50.1 mpg because of the shift in consumer buying preferences to sport-utilities and light trucks. NADA, the automakers and several industry groups spoke out against the draft reportês conclusion. But a few days before Trumpês inauguration, EPA issued the rule in final form, keeping the 54.5 mpg goal, leaving the auto industry extremely unhappy.

Last week, Trump announced not that he would roll back the rule though that could come later, in light of his and EPA Administrator Scott Pruittês concern about over regulation. The administration is simply reviving the review process. The auto industry supports that step strongly.

NADA continued to emphasize the ruleês effect on vehicle affordability. In his statement applauding the Trump administrationês action, NADA President Peter Welch said, –Maintaining vehicle affordability is critical to actually building on the progress the industry has already made on increasing fuel economy and lowering vehicle emissions. As dealers, our top priority will always be ensuring that working men and women have the ability to purchase the fuel-efficient cars and trucks they need at prices they can afford.”

Correspondingly, Mitch Bainwol, president of the Auto Alliance, touched on several issues of concern to the auto industry and to consumers. –Now we will get back to work with EPA, NHTSA, CARB and other stakeholders in carefully determining how we can improve mileage and reduce carbon emissions while preserving vehicle safety, auto jobs and affordable new cars and trucks.”

One advantage the Obama administration rule had from the industryês point of view is that it set a single national standard. Automakers and dealers didnêt have to worry about selling different cars in different states. If, as many expect, the 2025 deadline is moved back, there will again be one rule for California and the states that follow it (including Maryland and DC) and another rule for the rest of the country.

California still has a waiver allowing it to create its own stricter clean air rules through 2025 though the Trump administration may try to revisit that waiver. California Gov. Jerry Brown has said he plans to file a lawsuit, with New York, challenging Trumpês move to reopen the midterm review of fuel economy rules.

Trump made clear during his speech in Michigan the reopening of the midterm review, for which, in return, he expects automakers to create U.S. jobs. –Weêre going to do some wonderful work with you, but youêre going to have to help us with jobs,” he said. Trumpês previous statements have shown that he may not clearly understand the global nature of the auto industry. He believes one key to creating new jobs is cutting regulations.

EPA Administrator Pruitt, who has often talked about EPAês regulatory overreach, said in a statement, –These standards are costly for automakers and the American people. We will work with our partners at DOT to take a fresh look to determine if this approach is realistic.”

Some Japan-based automakers, including Toyota and Nissan, have said they will continue with their plans to build more fuel-efficient and alternative fuel vehicles, regardless of the Trump administrationês actions.