On Monday, the Trump administration said it planned to rollback vehicle fuel-economy standards to boost the nation’s auto industry.
This makes no sense.
For one, the auto industry doesn’t need a jump start. Car sales in the U.S. have been near record highs for several years. And, if the president is so interested in helping the auto industry, he wouldn’t have unilaterally imposed tariffs on steel and aluminium that will raise costs for car makers. Since the March tariff announcement, steel prices have already risen, costing manufacturers more to buy the raw material for products as diverse as chipper knives used in sawmills to warships to cars.
Environmental Protection Agency Administrator Scott Pruitt and lobbyists for American car makers argue that the fuel economy standards are too onerous. They are not.
The current standards, which went into effect in 2012, were not simply imposed by the Obama administration. Instead, the corporate average fuel economy, or CAFE, standards were negotiated by federal regulators, car makers, unions and environmental groups. Under these standards the gas mileage for a 2018 model year light truck, such as a Ford 150 is 19 miles per gallon, as posted on the vehicle’s window sticker at a dealership. It is 26 miles per gallon for a typical car.
In 2025, those standards rise to 23 mpg for the truck and 34 mpg for the car.
American fuel economy standards have long lagged those in other developed countries, especially those of the European Union. This is despite the fact that many of the same manufacturers make cars that are sold on both continents. For example, American car makers sell cars in Europe that get between 40 and 60 miles per gallon and SUVs that get more than 50 miles per gallon. If they make these vehicles for the European market, they can make them for the US market, too.
American auto dealers argue that Americans aren’t interested in fuel-efficient vehicles. It is true, that Americans buy far more trucks and SUVs that Pruises and Volts, but Americans say they value fuel economy.
Of course, these sentiments fluctuate over time. When fuel prices are low, American buyers tend to favor larger, less fuel efficient vehicles. But, when gas prices rise, they trade-in those vehicles for smaller, more efficient models. In 2007, when gas prices neared $3 a gallon, Toyota Priuses, a hybrid vehicle, outsold the popular Ford Explorer SUV. Higher fuel economy means less money that Americans spend on gasoline and diesel fuel.
If fuel economy standards are lowered in the US, domestic automakers will be ill prepared to respond the next time gas prices rise, says Adam Lee, the owner of numerous car dealerships in Maine that sell both American and Japanese brands.
“Toyota, Honda, Nissan are not going to stop researching more efficient vehicles,” he said. “The American manufacturers will fall behind.”
He also disagrees with the argument that meeting the current standards are raising the prices of cars in America. Much more of the price increase can be tied to the proliferation of technology, such as navigation and communication systems, that now comes with most vehicles.
Higher fuel economy standards save Americans money and reduce carbon pollution, a major contributor to climate change and lessen emissions of pollutants that harm human health and the environment.
These standards should not be abandoned.
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