4 automakers reach emissions deal with California, bucking rollback
Fuel economy set to increase to almost 50 mph by 2026
Ford, Volkswagen, BMW and Honda have reached a deal with California to increase gas mileage standards and reduce greenhouse gas (GHG) emissions, setting a national standard, a longtime auto industry goal.
The deal between the four automakers and the California Air Resources Board appears to offer a way around the thorny standoff between the Trump Administration and California over the administration’s push to roll back the standards laid out during the Obama Administration. The fight, however, is expected to continue in the courts despite the deal as the administration works to rewrite the rules. A White House spokesman did not immediately respond to a request for comment.
Notably, the deal “recognizes California’s authority” and would increase the average fuel economy of the automakers’ new vehicle fleets to almost 50 mpg by model year 2026. During a conference call Thursday with California Gov. Gavin Newsom and CARB Chair Mary Nichols, officials noted that the Trump Administration’s plan would bring that only to an average of 37 mpg by that time.
The deal would stretch out the timeline for the improvement on the standards by a year from the Obama-era rules and would only apply if the administration follows through on its rewrite, which Newsom indicated has no justification since automakers themselves are willing to abide by more stringent rules.
Newsom called the deal a game changer and said California is asserting itself while reserving its rights to litigate.
“Regardless about what the Trump Administration determines in the next few weeks, this is the direction we’re headed in,” he said.
Newsom praised the four companies’ “significant leadership” and said they deserve “enormous credit.” He said he anticipates additional companies signing on, and the release noted that the deal is available to others.
The four automakers issued a statement Thursday touting the deal’s benefits.
“Ensuring that America’s vehicles are efficient, safe and affordable is a priority for us all,” the statement said. “A 50-state solution has always been our preferred path forward and we understand that any deal involves compromise. These terms will provide our companies much-needed regulatory certainty by allowing us to meet both federal and state requirements with a single national fleet, avoiding a patchwork of regulations while continuing to ensure meaningful greenhouse gas emissions reductions.”
Honda issued its own statement as well.
“The framework provides regulatory stability, greater environmental benefits and reduced compliance costs. As a leader in producing efficient, low and zero-emission vehicles, Honda believes this is a win for our customers and for the environment.”
The deal follows recent action by automakers to push the administration to reach a deal with broad support from California and other states. Seventeen automakers, including Ford and General Motors, had sent a letter directly to President Donald Trump urging one national standard in hopes of avoiding an extended period of litigation and regulatory uncertainty.
A Fiat Chrysler Automobiles spokesman, however, said the automaker was not invited to participate in the current discussion.
In a statement, FCA said it is committed to improving the fuel economy of its fleet but noted a need to adjust the rules.
“We have been clear throughout the federal rulemaking process that the current standards need to be adjusted to reflect changing conditions in the marketplace, and today’s announcement acknowledges that is true. We look forward to reviewing the details of this agreement, as well as the federal rule later this year,” the FCA statement said.
Those changing conditions involve the relatively low price of gas and the apparent consumer shift away from small cars to SUVS and trucks.