Congress Is Pushing Back on the Trump Fuel Economy Rollback. Why Aren’t Auto Companies?

June 18, 2019 | 6:22 pm
Dave Cooke
Senior Vehicles Analyst

On Thursday, two House Energy and Commerce subcommittees are holding a joint hearing examining the Trump administration’s rollback of fuel efficiency and emissions standards for passenger cars and trucks. The witnesses include the regulators moving forward with this disastrous plan and at least one of the key state regulators opposing it, but one voice likely to be missing from the hearing will be the auto manufacturers themselves, who set this rollback in motion by requesting the President undo the rules in the first place.

Auto companies refuse to own their role in the rollback

The auto companies have recently tried a new tack in its media strategy to urge the public to forget its role in this mess, playing the woe-begone victim of an administration ignoring both science and the public interest in a letter to the President urging him to rethink the current proposal. And unfortunately, many in the media have adopted the frame precisely as the auto companies intended, painting a story of the letter as an indictment of the President’s policies.

Unfortunately, the media has the automakers’ letter all wrong—it shows nothing new, and certainly isn’t pushing back on the outcome. The auto companies once again asked for a bevy of carve-outs, loopholes, and weak standards. They may be trying to hide the rust under a new coat of paint, but it’s the same old jalopy they’ve been trying to sell since day one—the President is giving them exactly what they asked for, but it’s just they really wish his administration had crafted a more legally defensible escape hatch.

The telltale sign is in the automakers’ letter to California. In their letters, the auto companies whine about the lack of a 50-state standard as a result of the administration’s proposal, but if the auto companies were so concerned about the need for a 50-state standard, they’d acknowledge that we already have one on the books that’s saving consumers at the pump. Instead, they continue to beg California not to exercise its right to protect its citizens while trying to weaken those rules.

Auto companies aren’t the victims—consumers are

While one might want better from companies, it’s hard to be surprised. This is an industry with a history of fighting regulations at every turn. As Brett Smith of the Center for Automotive Research puts it, “They are looking out for their own best interest, as every company and every person does at the end of the day.”

Of course, that’s precisely why regulators must set strong standards—these corporations aren’t actually interested in the public good, and they certainly aren’t going to do it themselves. And as a result of the auto companies’ ask for weaker standards and an administration all too willing to give it to them, consumers are going to pay more for gas as we veer towards environmental catastrophe. Thanks, guys.

Updated analysis shows auto companies still asking for a rollback

As I wrote last year, the auto industry has been asking for a rollback at every turn, damn the consequences to consumers and the environment. To more accurately assess the impacts of the flexibilities requested by the auto companies and their trade groups, I’ve recently modeled how the various automaker proposals would affect future compliance strategies. For example, incentives for electric vehicles could encourage more deployment of electric vehicles, but weaker overall stringency disincentivizes all technology deployment—our modeling examines the interaction of these various requests and considers the trade-offs.

Even the most beneficial positions by major automakers would represent a step backwards from the standards we have today, even if the stringency of the underlying curves were left intact. Our latest analysis (in red) continues to show that the magnitude of some of these proposals for “flexibilities” are so large that they could erode the standards as much as the flat-line alternative preferred by the Agency we have noted here as a “rollback.”

The end result is not particularly surprising—our updated analysis falls smack in the middle of our previous estimates (Figure 1), meaning that while automaker proposals may not be quite as bad as we feared, they are also not as good as we had hoped.

Automakers and administration seem to be in alignment

Earlier this year, it was reported that the administration may adjust its proposal upward up to 0.5% improvement per year (Figure 2, Alternatives 2/3), slightly better than the original proposal but just 1/10th of the nearly 5% per year required under current standards. Even doubling such a weak proposal to 1% would do little to mitigate its adverse consequences (Figure 2, Alternative 4).

The administration considered a number of alternatives in its proposed rulemaking, though none would yield even half the benefits of the current standards. Proposals from automaker trade groups, it turns out, were not any better. Honda’s proposal represents the highwater mark for the industry, though it, too, falls well short of the current standards.

The Auto Alliance’s proposal falls right in line with such an adjustment by the administration in terms of its impact on emissions and fuel use…which is to say, not much improvement. Furthermore, its comments on the proposal included telling the administration how it could bolster its flimsy legal basis for the awful regulation that, when finalized, will inevitably wind up in court.

The Global Automakers’ proposal is better, but essentially amounts to exactly the same thing as is rumored the administration is putting forth, except starting a year later in 2022 instead of 2021. One more year of strong regulation may be better than nothing, but not much better.

Will automakers push for improvements or side with the administration?

Honda’s is the only proposal which goes beyond the proposals offered by the administration. While it would represent nearly a 30 percent loss in emissions from the current standards, that’s only half as bad as its trade association’s proposal, making them one of few automakers who are on the record supporting something better than the administration has offered. During EPA’s actions under then-Administrator Scott Pruitt which started this rollback fiasco, Volkswagen supported maintaining the current standards as-is, but they’ve gone quiet since. Only Tesla has been a consistently vocal advocate among vehicle manufacturers.

Given everything at stake, it is up to these and other automakers to distance themselves from the administration’s proposal right now–and not just by asking for a different, loophole-friendly standard that harms the environment to an equal degree. For example, if a company like Ford wants to tout its environmental bona fides, it should be working with California to press forward with the strong standards working for American consumers today, not collaborating with its trade group and the administration to erode them.

The administration is getting ready to finalize a proposal that will hurt the economy, undermine national security, and increase emissions. When this regulation inevitably winds up in court, it will be incumbent upon the auto companies to side with the states opposing this destructive policy. The auto industry supported rolling back these standards—they must now fight them or forever be associated with the negative repercussions on their consumers and the environment.