The administration of US President Donald Trump today revealed a proposal to cap federal automotive fuel economy requirements at their 2020 levels rather than letting them grow incrementally through 2025 as they’d been set to do, and to revoke the California Air Resources Board’s ability to set its own standards, the Detroit Free Press reports. The proposal will be subject to a 60-day comment period, with the administration not quite yet ruling out alternative options including incrementally increasing federal fuel economy requirements over the coming years as the old EPA/NHTSA regulations had mandated.
Nonetheless, the federal agencies stand in support of the relaxed regulations, with acting EPA Administrator Andrew Wheeler saying: “We are delivering on President Trump’s promise to the American public that his administration would address and fix the current fuel economy and greenhouse gas emissions standards.” Freezing federal fuel economy standards after 2020 strikes “the right regulatory balance” between cost, safety, and environmental concerns, he says, and represents a “more realistic” goal than what was enacted under Barack Obama.
Ever-tightening fuel economy mandates like those in the US have helped drive automaker investments into powertrain electrification, like the $11-billion bet announced by Ford at this year’s Detroit Auto Show. Those investments were to help bring to market some 40 new electrified vehicle models around the world, including 16 pure-electric vehicles, and two-dozen hybrid and plug-in models like the forthcoming Ford Mustang Hybrid and Ford F-150 Hybrid.
We don’t expect Ford Motor Company to cancel its sizable investments into electrification, but if approved, the new US regulations might at least give the company a chance to slow down its development schedule, and it could even impact which of the 40 future electrified models end up being sold in the market. In a draft proposal uncovered by the press earlier this week, the EPA and NHTSA said that the reduced fuel mileage targets could drive 500k-barrels-per-day greater fuel consumption in the US, while saving some $500 billion in societal costs through 2029 and reducing highway deaths by up to 1,000 per year.