What does breakup of EPA/California fuel economy talks mean for Washington area dealers?

The Trump administration – specifically, the Environmental Protection Agency – broke off talks with California environmental officials recently over efforts to reach a compromise on fuel economy standards. EPA officials have said at the Washington Auto Show and elsewhere that EPA’s goal is to have a single national standard.

 

That’s certainly what automakers want. And a single standard would be very helpful to dealers in an area like metropolitan Washington, where consumers often cross state lines to buy a car. Back to that in a minute…

 

The talks broke down because neither side was willing to budge much from their original position. The Trump administration wanted to freeze fuel economy standards in 2021 instead of increasing them by 5 percent every year until 2025, as Obama-eras rules called for. At the same time, California wants to continue to be able to set its own, more stringent standards.

 

So what does all this mean for Maryland and Virginia dealers? With no agreement between the Trump administration and California officials, there could eventually be two sets of fuel economy standards: One for California and the states that follow it (including Maryland) and another, less stringent set of standards for the rest of the country (including Virginia). Automakers could send a different set of new vehicles to dealers in Maryland than to Virginia dealers. That may mean a customer who wants to buy a big SUV with poor fuel economy may not be able to find it at a Maryland dealer, but could easily find it at a Virginia dealer.

No changes would happen until after 2021, at which point there could be different administration. But all of this is a reminder that this issue is not solely one for West Coast dealers.

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