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Trump Cuts Fuel Efficiency Standards, Chastises 'Foolish' Auto Executives On Twitter

Trump Cuts Fuel Efficiency Standards, Chastises 'Foolish' Auto Executives On Twitter

The Trump administration has cut fuel standards and ushered in a plan calling for significantly lower annual increases in fuel efficiency.

What Happened

On Tuesday, the Environmental Protection Agency and the Department of Transportation finalized a norm titled “The Safer Affordable Fuel-Efficient (SAFE) Vehicle Rule” that will increase fuel economy and emission standards by 1.5% annually compared to the 5% increase called for according to the rules put into force in 2012.

The Trump administration rules will increase the overall industry average required fuel economy to 40.4 miles per gallon by vehicle model year 2026, which is 6 miles less than the 2012 rule. Originally the administration wanted to freeze the standards.

Commenting on the new standards, EPA Administrator Andrew Wheeler remarked, “This rule supports our economy, and the safety of American families.”

Meanwhile, California, which had a waiver under the Clean Air Act and set its own emissions standards, is leading a group of Democratic states and cities in suing the administration, after its waiver was revoked.

California previously had the authority to set tough emission standards for itself and 12 other states. 

The tug-of-war between Trump and California on emission and fuel standards has led to automakers being split into two camps. While Ford Motor Company (NYSE: F), Honda Motor Company Ltd (NYSE: HMC), Bayerische Motoren Werke AG (ETR: BMW) and Volkswagen AG (ETR: VOW3) signed a deal with the California Air Resources Board to cut greenhouse gas emissions and produce fuel-efficient cars, General Motors Company (NYSE: GM), Toyota Motors Corporation (NYSE: TM), and Fiat Chrysler Automobiles NV (NYSE: FCAU)  backed Trump in the California emissions lawsuits. 

President Donald Trump took to Twitter to promote the SAFE Rules and said, “My proposal to the politically correct Automobile Companies would lower the average price of a car to consumers by more than $3500, while at the same time making the cars substantially safer. Engines would run smoother. Positive impact on the environment!” 

He had some choice words for the car industry’s leadership and called them “Foolish executives!”

Obama was also active on social media on the issue and tweeted, “We've seen all too terribly the consequences of those who denied warnings of a pandemic. We can't afford any more consequences of climate denial. All of us, especially young people, have to demand better of our government at every level and vote this fall."

Why It Matters

The rollback of fuel economy standards and scrapping of California’s waiver would have implications for manufacturers of zero-carbon vehicles (ZEVs). It is expected that the share of ZEVs sold in 2035 would be reduced by up to 8 percentage points across the U.S., translating into 14 million fewer ZEVs being driven by 2035. 

Environmental consequences would be felt in terms of California’s air quality, as emissions rise by more than gigaton between 2020-2035.

The U.S.'s ability to reduce greenhouse gas emissions to keep global temperature rise below 1.5 degrees Celsius will also be impacted.


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