By eliminating CA’s greenhouse gas waiver and with a broader rollback of CAFE in the works, the Trump White House seems determined to kill off electric vehicles.
- Administration officials insist that the public doesn’t want EVs and other high-mileage cars.
- California Clean air waiver is being dropped as White House preps CAFE rollback.
- Automakers say they will maintain fuel-economy efforts and EV programs, anyway.
The Trump Administration will strip California of the right to set greenhouse gas targets, a Clean Air Act waiver the state has used to press for even tougher fuel economy standards than the feds have mandated – and, in the process, press the auto industry to roll out fleets of new battery-electric vehicles.
“No state has the authority to opt out of the nation’s rules, and no state has the right to impose its policies on the rest of the country,” said U.S. Department of Transportation Secretary Elaine Chao during a Washington news conference Thursday, adding that, as a result of the rules approved by the Obama Administration, “Consumers were being priced out of newer, safer vehicles.”
The elimination of the waiver will be followed in the coming weeks by a formal rollback of the Corporate Average Fuel Economy, or CAFE, standard in the coming weeks. That has been one of the priorities then-candidate Donald Trump focused on during his campaign for the White House. During the Thursday news event, Chao suggested the revisions will be more “reasonable” than the widely criticized target the administration revealed late last year.
The moves are the latest in a series of steps the Trump Administration has taken to roll back environmental standards, particularly those enacted during the Obama Administration. The White House has, among other things, taken steps to encourage the use of coal. Indeed, the president has been particularly scornful of green energy, at one point suggesting that wind generators can cause cancer.
During their news conference, Chao and EPA Administrator Andrew Wheeler took a number of shots at the battery-cars that the current CAFE rules, along with the California clean air mandates, would have encouraged.
Wheeler broadly condemned the Obama rules, contending they were responsible for the run-up in new vehicle prices to an average $39,000 during the first quarter of 2019. EVs, in particular, he claimed, run $12,000 more than conventionally powered models, a price penalty partially offset by taxpayer-funded incentives — more than half going to motorists making over $100,000 annually, the EPA chief said.
“Americans are paying more for SUVs and trucks so automakers can sell cheaper electric vehicles,” he said.
Transportation Secretary Elaine Chao. (Photo: Getty Images)
For her part, said Chao, “The (revised rules) will not force automakers to spend billions of dollars to build cars that American consumers do not want to buy or drive.”
But don’t write the EV’s obituary yet. While automakers are pleased with having a single, national fuel economy target, they aren’t rushing to pull the plug on electric vehicle programs.
“We’re not changing our strategy,” Art St. Cyr, the head of automotive operations for American Honda, said, following the debut of the company’s first gas-electric SUV, the 2020 CR-V Hybrid.
Honda still plans to roll out a flood of new hybrids and all-electric models, products expected to generate two-thirds of its global sales within a decade.
The emphasis should be on the word, “global.” With Europe, Japan, China and other key markets setting their own, tough mandates encouraging electrification, it makes less sense to stick with conventional, gasoline-powered vehicles that may only have an outlet in one market, the U.S., industry analysts note.
Honda’s first U.S. gas-electric model, the 2020 CR-V Hybrid. (Photo: Paul Eisenstein)
Honda isn’t the only one that seems ready to hold to its existing plans. General Motors, meanwhile, proposed a $7 billion investment, most of that for production of electric vehicles, including a battery-powered pickup, as part of its initial settlement offer to the United Auto Workers Union. While the contract was rejected, and the UAW has gone on strike, the investment plan is expected to remain part of a final settlement.
Ford has stepped up its own electrification program in recent months, not only committing $11 billion but forming new alliances with both Volkswagen and start-up Rivian. A high-ranking executive recently said on background that even if the Trump Administration did order a sharp rollback in mileage, there would be few changes made.
There is, of course, another reason why the industry seems likely to hold course. California has already made clear it will battle the administration’s moves in court, and other legal challenges are expected. Meanwhile, the next presidential election is barely 14 months away and, with the outcome anything but certain, automakers realize that any rollback of CAFE standards could again be reversed. In an industry that requires long-term planning, manufacturers will want to be sure about what direction they take before pulling the plug on their EV programs.
WHY THIS MATTERS
According to the Trump Administration, the new moves will lower vehicle costs, improve safety, and create jobs. Critics contend the opposite will happen, especially if automakers abandon EV programs. But that does not appear likely.