It is no secret that the automotive industry is undergoing a bit of an internal crisis right now as it relates to fuel economy standards. When the Trump Administration rolled back its predecessor’s plans for efficiency standards, five automakers, including Ford, joined forces with California in 2019 to create their own set of more stringent standards. This agreement saw the automakers committing to figures that were stricter than those highlighted by the Trump Administration’s rollback, but still more lenient than the Obama era policy. Now that the Biden Administration is in full swing, the automakers who backed the Trump plan are looking to avoid a complete reversal. According to a report by the Associated Press, they’re asking the feds to reject the Obama Administration’s emissions standards once again in favor of something more merciful.
The Trump Administration’s rollback saw automakers faced with mileage requirements that increased by 1.5 percent annually between 2021 and 2026. The California plan, which is currently followed by 13 states, was set at a rate of 3.7 percent annually. Under the Obama Administration, this figure was set at just under 5 percent annually.
This coalition of automakers includes American giants like General Motors and Stellantis, as well as the world’s largest automaker in Toyota. These companies have proposed a deal that would see the new national emissions standards fall below either the aforementioned California plan or the Obama Administration’s targets, while being tighter than those passed by the Trump Administration. That said, this group also wants to see some incentives tossed their way that will help them reach these newly proposed figures. More specifically, they would like to see the return of a multiplier for compliance credits received for building electric vehicles. This was a part of the Obama era plan, but it was removed by the Trump Administration in its rollback. The automakers argue that this will incentivize the production of electric vehicles, and therefore it’ll help reduce pollution overall.
The White House has yet to release any official statement related to these newly proposed emissions standards. It is expected however that an answer will come on April 22, as the Biden Administration hosts an Earth Day climate summit. That said, this issue presents an interesting challenge for the new President, as his administration has made it a priority to expand electric vehicle adoption in the country. If this plan could help get more EVs on the road, they might entertain it to some extent. That said, the President has previously stated that he would like to see the Obama era emissions standards come back into effect.
It is worth noting that the Biden Administration has no real obligation to listen to what these automakers have to say here. This is especially true when companies like Ford and VW have already sided with California’s stricter standards. Furthermore, it’s not like the automakers didn’t agree to the Obama era policies a decade ago, albeit with some hesitancy. That said, these companies likely didn’t expect the popularity of large SUVs and trucks to explode during that timeframe. Of course they are somewhat to blame for that on their own, considering they’re the ones who killed off fuel-saving passenger cars. There isn’t a simple answer here, which is exactly why we can expect a bit of a battle to take place before Earth Day.