The worldwide trend is clear, like a “Hazard Ahead” sign on the roadway. From China to Europe, automakers are being pushed hard to clean up their cars and combat climate change. Those who dither and delay face an existential threat, from both government regulators and rivals that race ahead in technology and competitiveness.
So what are automakers including General Motors, Toyota, Nissan and Fiat Chrysler Automobiles doing? They’re all backing a desperate, doomed ploy by the Trump Administration to kneecap tougher fuel-economy standards; rules that are as inevitable as the latest Australian hellscape or other environmental catastrophe. Trump’s move to blow up the historic standards – among President Obama’s signal achievements – was led by Scott Pruitt, the disgraced EPA Administrator who never met a polluter he didn’t love, and was forced to resign in the wake of serial scandals and ethics investigations.
President Trump plans to turn back fuel economy standards set during the Obama era. (Photo: Getty Images)
Battling Obama, California
Talk about backing the wrong horse. In cahoots with an administration that would surely support coal-burning cars, if only someone would build them, these automakers seek to strip California’s authority to set stricter emissions and greenhouse-gas rules than federal standards. California’s right was created by the Clean Air Act, and was set in stone over decades of legal precedents. If anyone thinks California is going back to the days of choking smog, they’re kidding themselves. California and a coalition of 18 states are now suing the EPA to prevent the unwinding of standards. The 140 million citizens and consumers they represent make up more than 40% of the U.S. car market.
These automakers are playing a dangerous game by siding with Trump against their own customers, who would enjoy cleaner air, improved public health and more-efficient cars. The Obama standards, which would have nearly doubled the fuel economy of the typical new car to 54.5 mpg by 2025, would have cut auto-sector emissions in half, and saved Americans more than $1.7 trillion in gas. The average new-car buyer in 2025 would have saved more than $8,000 in fuel over the life of the vehicle, easily offsetting added technology costs.
The tougher fuel economy standards passed during the Obama administration would have saved drivers thousands of dollars at the pump. (Photo: Getty Images)
Instead, the Administration continues to tinker with a plan to freeze mileage standards at 2020 levels, or 37 mpg. That 37 mpg is such an easy climb that even many automakers, in light of competitive pressures, have actually lobbied Trump to make them harder. Backers of the Trump plan insist that serious efficiency gains will make cars unsafe, or cost industry jobs, the same debunked arguments automakers have been trotting out for decades. Every automotive engineer will tell you that fuel economy can be raised even as cars get safer; they’ve been proving it for more than a half-century. Is a Tesla Model 3 a dangerous car because it happens to deliver the equivalent of up to 134 mpg? In fact, the Model 3 is one of the safest passenger cars on the road today.
These are brazen scare tactics, the idea that tougher rules would somehow force Americans to drive tiny go-karts made from Kleenex. In fact, the Obama standards would have let consumers keep buying all the pickups or SUVs they want. The standards graded on a curve, putting vehicles in different categories based on their physical footprints, and maintaining the lower bar for light trucks that they’ve always enjoyed.
With its all-electric Mustang Mach-E readied for release this year, Ford has aligned itself with other carmakers supporting stronger fuel economy standards. (Photo: Ford)
To their credit, Ford, Volkswagen, Honda and BMW have seen which way the winds are blowing. Those global giants broke ranks to forge their own deal with California, pledging to boost their average fuel economy by 3.7% a year, to about 51 mpg by 2026; shy of the Obama standards, but close enough. That move infuriated Trump and sparked a Department of Justice antitrust probe, a dubious bid to intimidate automakers that the Department finally dropped last week. But Ford, VW and the others can rest easy, knowing they’re on the right side of history and the marketplace.
The most shocking signatory to this deal is Toyota, long considered the greenest of all automakers, at least until Tesla came along. The New York Times reports that some Californians feel especially betrayed by Toyota, whose popular hybrids made them a natural fit for the enviro-conscious state. The story suggests that some California consumers are already rethinking their automotive loyalties. “What are they thinking?” Jeff Goodby, a co-founder of the Goodby, Silverstein & Partners ad agency, which handles campaigns for BMW, told the newspaper. “I can’t imagine any Californian saying, ‘All things being equal, I’m buying the brand that spews more poison into our children’s air!’”
California Governor Gavin Newsom has already hit back, halting all state purchases of cars from GM, Toyota, FCA and other automakers that support stripping California’s authority to fight pollution within its own borders.
“Carmakers that have chosen to be on the wrong side of history will be on the losing end of California’s buying power,” Governor Newsom said in a statement. Some consumer groups have called for more boycotts, including the Consumer Federation of America, which sent letters to governors of more than 20 states, calling on them to stop buying cars from GM, Toyota, FCA, Nissan, Subaru, Hyundai, Kia, Mazda, and Mitsubishi.
The complicity of Fiat Chrysler Automobiles is less surprising, as its seeks government protection for its own short-sighted management. FCA now gets more than 90% of its American sales from pickups and SUVs, a historic high for any company. It also has the worst fleetwide fuel economy of any of the world’s automakers, and would face the steepest climb if tougher standards were imposed.
Fiat-Chrysler, which makes the vast majority of its money selling pickups and SUVs, is in favor of the Trump fuel economy rollback. (Photo: Ram)
Kicking the can down the road
Environmentalists, consumer advocacy groups and government officials are ripping automakers who are onboard with the Administration’s effort. Sen. Thomas R. Carper (D-Del.), said the fatuously titled “SAFE plan” – which originally was worse, threatening to freeze mileage standards for six years – would fail to deliver any of its purported benefits. “The SAFE vehicles rule, if finalized in its present form, will lead to vehicles that are neither safer, nor more affordable or fuel efficient,” Carper said in a letter to the head of the Office of Information and Regulatory Affairs.
By hitching their wagons to this plan, these automakers seem blissfully unconcerned that they’re risking their long-term credibility on green issues. At some point, a new Administration will be in town, and a newly empowered sheriff at the EPA. That EPA administrator is going to take his or her job seriously, as the chief steward of America’s natural resources. The agency will have long memories on which automakers sought to sabotage their authority, and evade reasonable mileage standards.
A new President and EPA chief will have every right to call GM CEO Mary Barra and other execs onto the carpet, and give them a (painfully short) timeline to catch up with the original Obama standards. These automakers chose to play political hardball, so they shouldn’t be surprised to take a line drive to the teeth. Their executives will start to whine about safety, or jobs, or whatever. And with that, the new Administration can tell Barra and Co. to get the hell out of their office, and get to work.