Last month, we reported on the EPA filing its midterm review of the fuel consumption standard early (before Trump takes over) in order to put in place a fleet requirement of 54.5 mpg by 2025, which would force automakers to add more electric vehicles to their fleet in order to compensate for their more gas-guzzling vehicles, like SUVs and pickup trucks.
Despite lobbying from virtually all automakers (except for Tesla), the agency went ahead with making the rule official last week and it could result in a significant acceleration of the rate of investments in EVs from current automakers.
Encouraged by Trump’s nomination for the head of the EPA being a climate change denier with close ties to the oil industry, automakers sent a letter to Trump’s transition team through their lobbying group in order to bypass the current administration.
They present the argument that demand for “alternative powertrains” (aka electric cars) is not strong enough for automakers to achieve fuel consumption requirements and that the EPA is rushing the rule in reaction to Trump’s election instead of making a “data-driven” decision.
While it’s easy to jump to the conclusion that the Trump administration could simply revert the standard, like it plans to do with several other initiatives launched by the Obama administration, it could actually not be as simple as that. Automotive News explains:
Legal experts have said it will be more difficult for the Trump administration and Congress to undo the determination than to unwind other regulatory actions issued by the Obama administration during its final months in office.
The 2025 determination is not a new regulation, so the EPA, under Trump, would likely have to go through an extensive process before withdrawing the determination, and could face lawsuits from environmental groups if they took that step.
Even if automakers could see the potential for the rule to be reversed and the fuel consumption standard lowered, they could decide to accelerate their investments in EVs in order to edge against the rule staying in place and having to pay fines if they miss the target – especially if the new administration decides to focus on other matters.
Tesla CEO Elon Musk has Trump’s ear now and if he can show a link between job creation and electric vehicle production, the new administration could be tempted to leave the rule in place and have automakers start investing in volume production of electric vehicles in the US.
While almost all automakers have announced several upcoming electric cars, very few are committing to mass production of those cars, which seems to be the reason for backing lobbying efforts to stop the EPA.
At one point, efficient diesel engines were seen as a possible solution to the new fuel consumption standard in order the improve their fleet average, but the recent series of ‘dieselgate’ scandals are showing that the only way they can reach the required level of fuel efficiency is by cheating. Therefore, battery-powered vehicles seem to be the most viable alternative, but automakers need to invest heavily in volume production throughout the entire supply chain in order to produce them at affordable prices.