Despite pressuring Donald Trump to lower corporate fuel economy mandates since practically day one of his presidency, automakers are now urging caution. The U.S. Transportation Department has drafted a proposal that would freeze vehicle requirements at 2020 levels through 2026, the Environmental Protection Agency’s lead administrator made a public case for rolling back mileage targets, and the White House seems ready to help car companies lower the bar.
Automakers seem to have won, so why the change of heart?
There’s a fly in the ointment. California and sixteen other U.S. states have vowed to maintain the existing Corporate Average Fuel Economy (CAFE) standards by any means necessary. Right now, there’s a California lawsuit accusing the EPA of arbitrarily reversing its course to side with automakers. The state is also pressing the federal government to validate its fuel economy waiver, which would allow it to set its own standards.
For automakers, making a deal with California is essential. If a handful of states keep more stringent fuel economy mandates, companies will still have to adhere to them. There’s little sense in building cars that meet the relaxed rules for most of the country if there’s still a significant number of states hitting the industry with penalties. Manufacturers would have to cater to the greener tastes of California, making this whole endeavor a lot less valuable.
On Friday, Trump met with auto industry leaders over the vehicle emissions rules. Afterward, two major auto industry trade groups said in a joint statement that Trump expressed an “openness to a discussion with California on an expedited basis.”
The accuracy of that claim is debatable. According to Reuters, California Air Resources Board spokesman Stanley Young said the state has not been contacted by the administration since Friday’s meeting. But we do know more talks with California were planned for this month. Whether or not they are a priority is another matter. The administration has been fairly clear that it doesn’t want to further delay the rollout of the proposal by debating with the state.
In fact, the lawsuit may have already pushed the issue past the point of negotiation. The Transportation Department’s fuel proposal carefully asserts that the 1975 federal CAFE law preempts states from imposing their own emissions rules, even those that were later granted waivers. It sounds as if everyone is already gearing up for a legal battle.
Mitch Bainwol, who heads the Alliance of Automobile Manufacturers and attended the meeting on Friday, said he still believes compromises can be made. “This is a solvable problem. There’s an outcome here that’s good for California, that’s good for this administration and terrific for the men and women who work for this sector,” he said.