Automakers cut deal with California in blow to new EPA fuel-economy standards

California and a group of automakers undercut the Trump administration this week with a side deal that largely keeps in place fuel economy and emissions goals the White House aims to relax.

Ford, Honda, Volkswagen, and BMW joined California in imposing stricter fuel economy standards through 2026; the agreement would put the final fuel economy target at roughly 50 mpg. The current standard finalized under the Obama administration calls for a 5-percent, annual increase to bring the final target to 51 mpg. The new deal comes as the Trump administration readies finalized rules to freeze fuel economy targets at 2020 levels. The administration argued the relaxed regulations will help more consumers buy new cars with modern technology and trade in older vehicles.

President Donald Trump (Photo courtesy DoD)

Should the federal government enact the relaxed standard, fuel economy targets would stand at about 37 mpg until 2026. Crucially, the Trump administration’s plan aims to revoke California’s waiver to set its own fuel economy and emissions regulations. More than a dozen other states follow California standards as well. California, along with 16 other states, filed a lawsuit challenging the EPA’s proposal.

While automakers lobbied for easier fuel economy standards, many have said the Trump administration’s current target goes too far. Instead, the four automakers that worked with California said the new agreement gives them the added flexibility needed to meet realistic goals. 

California Gov. Gavin Newsom said the agreement puts in place a reasonable compromise between the two fuel-economy standards.

“I now call on the rest of the auto industry to join us, and for the Trump administration to adopt this pragmatic compromise instead of pursuing its regressive rule change. It’s the right thing for our economy, our people, and our planet,” he said.

President Donald Trump (Photo courtesy Gage Skidmore/Wikimedia Commons)

California Air Resources Board Chairwoman Mary Nichols added if the current federal proposal is finalized, the state challenge the ruling in courts.

The revised federal regulations were supposed to be ready this summer, though opposition has led to the final rules being delayed. The government should have its final proposal ready around Labor Day. The NHTSA and EPA said of the agreement that nothing in the proposal’s language stopped automakers from creating “next-generation highly fuel-efficient vehicles,” however.

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