San Francisco, United States – Earlier this month, President Trump made an announcement to lower car fuel efficiency standards, he said would give Americans more freedom to choose large cars and make them more affordable.
Even though the idea that it would save US drivers money is “highly speculative,” experts claim, the proposed policy change also leaves the years and billions in investments in cleaner cars, including electric vehicles (EVs).
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The proposed new standards will make it possible for cars to run at 34.5 miles per gallon (14.7 km per litre) instead of the previous administration’s 50.4 miles per gallon (19 km per litre) set by President Joe Biden.
Trump referred to it as the “Freedom Means Affordable Cars” proposal, claiming that US manufacturing would benefit from lower fuel efficiency standards for new cars up to $1, 000.
However, Haas School of Business, a faculty member at the University of California at Berkeley, claims that American car manufacturers have already made investments in line with outdated standards. It is highly speculative to assume that this will save consumers a lot of money.
Ford Motors announced a $ 19.50 billion hit as it cut back plans to produce EVs, along with the US consumers’ continued preference for SUVs and other petrol guzzlers. General Motors also warned that there could be more hits as a $1.6 billion impact is related to its EV pullback in its quarterly results from October. Additionally, it announced 3,400 layoffs at its EV locations.
Federal budget cuts will stifle the already slow transition to electric vehicles in the US, where they account for less than 10% of the market and are significantly behind the global EV sales, which accounted for 25% of all car sales this year.
Andrew Hoffman, a Ross School of Business professor of sustainable enterprise at the University of Michigan, believes that the government can support markets in this transition.
Because of the lengthy distances that can cause electric car drivers to be anxious, Hoffman describes the US as a “unique market” for SUVs and pick-up trucks. It emphasizes the necessity of a charging station network, which is another area where the Trump administration has made business plans-related cuts. 16 states filed a lawsuit against the Trump administration on Tuesday for omitting billions from funding EV charging stations.
The US’s largest EV manufacturer, Tesla, is anticipated to suffer the most from these changes. As the $7,500 tax credit expired, it saw a 23% decline in US sales in November compared to the same period last year.
Waymo, a Google-backed electric-powered autonomous vehicle, has a fleet of just a few thousand cars, and overall experts predict that the market share of EVs will decline even further.
A reduced charging network may encourage consumers to buy petrol-guzzling cars in addition to the elimination of EV tax credits, which could increase fuel bills for the household.
According to Dan Becker, director of the Center for Biological Diversity’s Safe Transport Campaign, “consumers will spend more money on gas-guzzling cars.”
The proposed new standards may not have much impact on fuel consumption in the next year or two, but “if the rules hold, they will significantly impact fuel consumption in the 2030s,” says Mathew Tarduno, assistant professor of economics at the University of Illinois at Chicago.
threatening human health and polluting the climate
The most recent addition to a slew of measures announced this year that could reduce fuel efficiency for US cars.
The penalties for cars breaking fuel efficiency standards were reduced to zero in July when the tax and spending bill was passed. The Environmental Protection Agency (EPA) announced a proposal to overrule the Endangerment Finding, EPA’s long-standing, science-based finding that greenhouse gases endanger human health and welfare, and roll back standards to limit greenhouse gas emissions from new cars and trucks. Additionally, tailpipe emissions were relaxed.
Environmental groups claim that the EPA will soon be reversing its decision to reject the Endangerment Finding and that they are preparing to file legal lawsuits against the reversal if that is the case.
A public hearing period is open until the end of the month regarding the fuel standards. According to Becker, the Center for Biological Diversity, “We intend to share our position with the administration and then, with colleagues, sue them” if the proposal is accepted.
How the Department of Transportation treats EVs when establishing new standards might be the subject of future lawsuits. According to Nikki Reisch, director of the Center for International Environmental Law’s (CIEL) climate and energy program, the department is required to adhere to the highest practicable standards.
In terms of fuel efficiency, gas-powered vehicles can’t compete with EVs and hybrids. She continued, “These cleaner, more effective technologies exist and cannot be ignored.”
According to the EPA, vehicular emissions contribute to carcinogens in the air and can lead to respiratory and cardiovascular illnesses.
According to the American Lung Association, the transportation industry is in fact the main contributor to US air pollution.
According to William Barrett, assistant vice president of nationwide policy at the American Lung Association, the easing of fuel standards “turns the clock back on public health standards.”
According to Barrett, children could be particularly affected by increased air pollution from possibly higher vehicle emissions.
Because their lungs are still developing, children are more vulnerable. They might be impacted by increased pollution more quickly and permanently, such as putting them on the soccer field field or putting them in more ER visits.
In order to halt the new standards, the Lung Association intends to make its comments during the public hearing process.
Choice is a right.
However, according to Karl Brauer, an auto analyst and writer for iSeecars.com, car emissions have decreased since the Clean Air Act’s passage in 1970 and also as a result of alterations to regulations that were introduced to lower emissions.
According to Brauer, “Cars got cleaner a long time ago.” The effects of continuing to implement such regulation are negligible.
With the elimination of tax credits for EVs, gasoline and electric vehicles will now compete for consumers’ preferences on an equal footing, according to Brauer, and lower costs and higher profit margins for auto companies and lower prices for consumers.
In the fuel standards rollback announcement on December 3rd, the Trump administration announced that major carmakers would save more than $35 billion in technology costs.
According to the National Highway Traffic Safety Administration (NHTSA), fuel costs for drivers are expected to rise, and US drivers are expected to pay an additional $ 85 billion annually through 2050.
During his White House announcement, Ford and General Motors’ CEOs sat next to Trump.
Mary Barra, the company’s CEO, stated that the announcement would allow automakers to offer a wide range of gasoline and electric vehicles while maintaining consumer preferences and lowering costs. At the New York Times Deal Book summit, she remarked, “Regulatory requirements do not get ahead of the consumer.”
A fuel-based car would cost less than an EV, according to Brauer, given the recent drop in gas prices. Additionally, they may not be attractive due to the lack of enough charging stations.
However, the new standards could diverge US car manufacturers from global markets, which are moving toward more fuel-efficient and electric vehicles. The proposed standards may improve the appeal of SUVs and other gasoline-guzzlers in the US, but they may also make it harder to compete in global markets.
According to Tarduno of the University of Illinois at Chicago, “one question is whether US automakers will be required to follow various types of regulations in various locations.”
China is renowned for its electric vehicles, making up the majority of the world’s automotive industry. “GM and Ford will want to be global players.” According to Becker of the Center for Biological Diversity, EV manufacturers will shut them out if they don’t produce them.
Brauer, however, has a different perspective.
