Automakers to steer clear of Trump fight
COMPANIES HOPE FOR THE BEST AS STATE OFFICIALS VOW TO FIGHT ANY ROLLBACK BY EPA
A possible legal battle between the US government and California over future fuel- economy standards could be costly and lengthy |
Apossible clash between the US government and California over future fuel- economy standards raises the knotty question of whether automakers one day might have to build two different sets of the same vehicles for various parts of the nation.
Even though automakers pushed the Trump administration to loosen standards, they will work to avoid such a costly and complicated scenario — one that probably would lift vehicle sticker prices as the companies pass some of those costs along to consumers — analysts said Friday. “Automakers do not want to build two sets of cars, for sure,” said Jessica Caldwell, director of industry analysis at Edmunds. com.
Still, there’s a good chance that the Environmental Protection Agency and California could be locked in court for years over the EPA’s expected plan to scale back mileage targets that the Obama administration had drafted in tandem with California.
The targets aimed to boost average fuel economy for passenger cars and sport utility vehicles to 55 miles per gallon by 2025. But the agency plans to replace those targets with a weaker standard that would be unveiled soon, according to people familiar with the plans.
Officials in California, whose standards have been adopted by a dozen other states, vowed to challenge any rollback by EPA chief Scott Pruitt. “California has its own authority under the Clean Air Act to fight pollution,” Senator Dianne Feinstein ( Democrat from California.) said in a statement Friday. “I fully support California, the largest auto market in the country, to use that authority to retain the achievements being made that will likely result in fuel efficiency of more than 50mpg by 2025.”
The years of litigation and investment uncertainty will be far harder on the auto industry than simply living up to the fueleconomy standards they once embraced.” Dianne Feinstein | Senator from California
The EPA’s plan “will create confusion for the industry because manufacturers will have to meet two separate standards,” Feinstein said.
“The years of litigation and investment uncertainty will be far harder on the auto industry than simply living up to the fuel- economy standards they once embraced.”
Assuming California prevailed in court, “if we got to two standards, the consumer is going to suffer,” said Rebecca Lindland, executive analyst at Kelley Blue Book. “Nobody wins, including the environment, in this scenario.”
That’s why Caldwell speculated that ultimately the manufacturers “would try to meet the mandate” in the state. “They would produce one set of cars compliant in California and sell them everywhere else,” she said.
The Alliance of Automobile Manufacturers, a trade group representing a dozen major automakers including General Motors Co, Ford Motor Co and Toyota Motor Corp, “would prefer to have one standard for the entire country,” said spokeswoman Gloria Bergquist. “We think that’s better for consumers, the auto industry and California.”
She acknowledged that while the automakers currently have vehicles that could meet the rising fuel- economy standards — namely hybrids and other vehicles using electric power — there would be disruption in the marketplace if California’s legal fight was upheld and there suddenly were two sets of mileage standards in the country.
Those vehicles with full or partial electric power, and thus higher energy efficiency compared with those running with internal- combustion engines, account for only 3 per cent of the nation’s auto sales, Bergquist said.