NADA testifies at EPA hearing on midterm review of CAFE rules

NADA testifies at EPA hearing on midterm review of CAFE rules

Regulators reviewing fuel economy standards through model year (MY) 2025 that were put in place in 2012 should reconsider the standards in light of consumer realities in the showroom. That was the message from Rhett Ricart, chairman of NADAês regulatory affairs committee, at an EPA hearing in Washington last week.

The hearing is the only one that EPA will hold on the midterm review of the greenhouse gas emissions rules. When the rules which require automakers to sell fleets averaging 54.5 mpg by MY 2025 were set in 2012, the country was looking at a very different automotive landscape. More consumers were buying cars instead of the SUVs and light trucks that dominate the market today. The industry agreed to the standards partly because they were anxious to have a single national standard rather than the patchwork of state standards that was starting to emerge.

Built into the rules was a midterm review, to be completed by April 2018. The review was to include input from all stakeholders, including the auto industry. EPA received a great many comments last year. Just before President Trump took office, the EPA said it had found that automakers were on track to meet the standards, which would go into effect as scheduled. The industry felt blindsided and said the decision was rushed out.

President Trump announced early in his term that he would reopen the midterm review. Last month, he said he would extend that review one year earlier, to MY 2021. The reopened midterm review was the reason for the September 6 hearing. NADA had sent comments last year saying that the standards set in 2012 may not be feasible in the current market. Ricart reiterated that point last week.

–Government policies mandating vehicles that fail to meet the needs, desires, or financial constraints of customers will force them to opt for driving what they have or buying used,” Ricart said. –And if that happens, we all lose.” Some estimates have found that the current federal standards could add as much as $2,000 to the price of a new vehicle.

Ricart also spoke of the importance of a single national fuel economy program. California has a waiver that allows it to set stronger standards than the national ones, and several other states, including Maryland, and DC, have announced that they will follow the California standards.

The Alliance of Automobile Manufacturers also testified, as Chris Nevers, vice president of energy and environment, emphasized costs and consumer preferences.

–To keep costs reasonable for buyers and maximize future production levels and fleet turnover, it is vital to clearly focus on consumer preferences and market realities,” Nevers said.

Environmental groups at the hearing expressed their strong support for the current standards. They said a thorough midterm review had shown that automakers are on track to meet the standards.

Thirteen state attorneys general, including those from Maryland and DC, have said they will sue the Trump administration if the standards are rolled back (Click here for the June 27 report in the WANADA Bulletin). With Trump having said earlier this year that –the assault on the American auto industry is over,” EPA Administrator Scott Pruitt confirmed this by saying, –chances appear good that the standards will be rolled back.” NADA has said it will submit written comments to EPA by the October deadline.

But environmental groups are fighting hard. The day after the EPA hearing, three environmental groups sued the National Highway Traffic Safety Administration (NHTSA) for delaying a rule that would increase penalties for automakers that violate fuel economy standards.

The groups the Sierra Club, Natural Resources Defense Council and the Center for Biological Diversity said NHTSA lacked authority to delay the penalty increase and ignored requirements that give the public a chance to comment. Last year, the Obama administration raised the penalty from $5.50 to $14 per tenth of a mile per gallon, to account for inflation.

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