The Trump administration released its proposed standards for vehicle efficiency on Thursday, rolling back rules set by the Obama administration.
The new rules freeze standards at model-year 2020 levels, an average of 43.7 miles per gallon for passenger cars, through 2026. The administration also proposed a repeal of California’s waiver to set more stringent standards than the national rules, including the state’s requirements for electric vehicles. After a public comment period, agencies said the rule should be finalized this winter.
The Environmental Protection Agency and the National Highway Traffic Safety Administration, the two agencies crafting the requirements, claimed they will lead to safer, more affordable cars using one “national standard.” The title of the rule, the Safer Affordable Fuel-Efficient or SAFE Vehicles Rule, nods at those arguments.
The claims have already faced significant blowback from environmental organizations, the clean energy industry, and transportation experts who say the conclusions are inaccurate.
In total, the administration estimated the rule will save the lives of 1,000 people per year that would have died in car crashes. The agencies also claimed the new rule would mitigate $2,340 in the average ownership cost of new vehicles and $500 billion “in societal costs” for the U.S. economy over five decades that it says are baked into the past administration’s rule.
“Our proposal aims to strike the right regulatory balance based on the most recent information and create a 50-state solution that will enable more Americans to afford newer, safer vehicles that pollute less,” said acting EPA Administrator Andrew Wheeler in a statement. “More realistic standards can save lives while continuing to improve the environment.”
The safety dance
The new rules claim that reducing the weight of newer models to comply with fuel standards makes them more dangerous. By reducing the upfront costs for newer models, the administration also argues drivers will retire older cars sooner and upgrade to newer, safer models.
John German, a senior fellow and co-leader of the U.S. program at the nonprofit International Council on Clean Transportation, has stated the administration’s logic is muddled.
“It doesn’t make sense,” he said.
German said the fuel savings from stricter emissions standards outweigh upfront costs, something he said buyers recognize when considering a new car. According to the Union of Concerned Scientists, the existing rules have already saved U.S. consumers over $64 billion in fuel costs.
The National Highway Traffic Safety Administration also hasn’t suggested that safety requirements or other updates will slow down fleet turnover in the past, according to German.
“This is something they are trotting out for the first time,” he said.
While the Insurance Institute for Highway Safety recognizes that bigger vehicles can be safer, it also notes that “fuel economy can be improved without sacrificing safety.”
The Environmental Defense Fund suggested that newer, high-strength materials can reduce car weight while also meeting safety standards. The environmental organization also said that “crash avoidance technologies” like autonomous braking and blind-spot avoidance, as well as cameras, are already becoming more common in newer models and making them safer.
The Union of Concerned Scientists notes that reductions in the weight of bigger vehicles — and thus lower average weight disparities between vehicles when crashes do happen — lead to fewer fatalities.
In response to the administration’s claim that the new rules will save Americans money, the Alliance to Save Energy noted that current standards save consumers up to $8,000 over the life of a vehicle.
“We should be committed to realizing these savings, not proposing to roll them back,” said President Jason Hartke in a statement. “Few policies have delivered the energy savings that fuel economy standards have — for both consumers and the environment.”
Research on the Obama-era rules from Indiana University also found that the standards, along with California’s zero-emissions vehicle program, would boost the economy overall. Researchers found the rules would add between 215,000 and 390,000 U.S. jobs, and gross domestic product would grow $25 billion to $40 billion above the baseline by 2025.
A recent forecast from clean energy advocacy group Energy Innovation estimated a change in policy would cost the U.S. economy over $450 billion.
Both Wheeler and Transportation Secretary Elaine Chao said the new rules were meant to be “more realistic” standards. In the past, some auto manufacturers have suggested they cannot meet the standards set by the Obama administration.
Though German notes that “current compliance does vary quite a bit from manufacturer to manufacturer,” he also said rapid technology advancements will make it easier for the companies that are lagging, like Fiat Chrysler, to meet requirements.
And despite debates about achieving stricter standards, many argue that the inevitable court fight over this policy change will be even worse for manufacturers, who need three or four years of lead time to develop and sell vehicles.
Obama’s policy brought the rest of the U.S. in line with standards in California — and the 13 states plus Washington, D.C. that follow those rules — and echoed the more stringent standards in other global markets, making it easier for companies to develop and sell fewer models for a variety of locations.
“Manufacturers don’t like complying with different standards,” said German. “That’s not how they develop and sell vehicles.”
One auto dealer based in Maine called the idea to roll back standards “ridiculous,” because it would pull the U.S. out of step with other markets.
“The reality is that Fiat Chrysler, General Motors and Ford compete in a global economy. China, India, Japan, South Korea and the European Union all have higher fuel-economy standards than the U.S.,” said Adam Lee, chairman of Lee Auto Malls, in a statement. “The world is moving to cleaner, more efficient vehicles. You don't have to care about clean air to see that reversing on fuel efficiency would put our automakers out of step with a global market. Do you think Honda, Nissan and Toyota are planning to make cars that are less efficient? When did America start to believe that losing our competitive edge was a good thing?”
The Alliance of Automobile Manufacturers has supported the Trump administration’s reconsideration of the rule. But in a statement on the change, the trade organization seemed to echo concerns about a split market.
“We urge California and the federal government to find a commonsense solution that sets continued increases in vehicle efficiency standards while also meeting the needs of America’s drivers,” wrote the organization in a statement, alongside The Association of Global Automakers.
The California conundrum
After the changes were announced, California Governor Jerry Brown promised “California will fight this stupidity in every conceivable way possible.”
The rules threaten California’s climate and pollution goals, as well as its right to set a target for zero-emissions vehicles.
The state, along with 16 others plus Washington, D.C., has already kicked off a court battle with the administration over the standards.
The outcome of that emissions challenge is part of what will create uncertainty for automakers. The administration said it wants to create one national standard for automakers to comply with.
In its rule, the EPA and NHTSA argued that California’s program conflicts with authorities granted under the Clean Air Act and the original act that created CAFE standards, in part because the state has used the waiver “to solve climate change” and not just address air quality issues. The EPA noted that despite the waiver, parts of the state are still in non-attainment with air quality standards.
The rule also noted that “elimination of California’s [zero-emissions vehicle] program will allow automakers to develop such vehicles in response to consumer demand instead of regulatory mandate.” The administration claimed the mandate has cost car manufacturers tens of billions of dollars on cars that few people buy. California is the country’s largest EV market.
In response to the changes, California Attorney General Xavier Becerra said, “the California Department of Justice will use every legal tool at its disposal to defend today’s national standards and reaffirm the science behind them.”
It’s unlikely the state and its allies will be the only ones to challenge the potential policy.
Attorneys general from Massachusetts and 18 other states, plus D.C., released a statement on Thursday announcing plans to challenge the administration. They said the policy change would increase carbon emissions at a level equivalent to adding 400 million cars to the road, and cost U.S. residents between $193 billion and $236 billion more on gas through 2035.
The group includes all states that use California’s standards over the federal rules.
“You’re going to have a mess on your hands,” said German. “Because this is going to be in the courts for years.”