DETROIT (WWJ) -- Detroit’s carmakers are applauding President Donald Trump’s “reset” of aggressive Biden administration fuel economy standards. Environmentalists, however, see it quite differently.
“This is a win for customers and common sense,” says Ford CEO Jim Farley.
The Detroit Three, in separate statements saying the move aligns fuel economy rules with market realities.
The change is a defeat for environmental groups.
“This is another Trump shell game that shuffles money to Trump’s oil and gas cronies at the expense of Americans’ wallets, health, and air quality,” says Will Anderson of Public Citizen.
Farley and Stellantis CEO Antonio Filosa joined President Trump for the White House Oval Office announcement. Ford CEO Mary Barra had a previous commitment, but was represented by John Urbanic, the manager of GM's Lake Orion plant.
In announcing the new plan, President Trump said the Biden administration standards were unrealistic.
"This is a green new scam, and people were paying too much for a car that didn't work as well."
The Biden fuel economy rules called for an average fuel economy of 50.4 miles per gallon by 2031, with double digit increases in some years. The new rules call for increases of less than one percent per year, with an average fuel economy of 34.5 miles per gallon by 2031.
The updated rules also eliminate trading of fuel efficiency credits and would officially consider crossovers and small SUV's cars, not trucks.
There will be a public comment period before the rules are official.
“We look forward to working further with NHTSA on environmentally responsible policies that also allow us to offer our customers the freedom to choose the vehicles they want at prices they can afford,” said Filosa.
The Trump administration says the Biden rules would have added a thousand dollars to the cost of an average vehicle. And the changes will save consumers a total of $109 billion.
Environmentalists dispute that. Public Citizen says the Biden standards would have saved Americans $23 billion in fuel costs, by making vehicles more fuel efficient.
“Rolling back fuel efficiency standards is another Trump policy that will increase costs for Americans, this time at the pump,” said Anderson.
While this is one of the most aggressive changes in fuel economy rules, it’s not the first time that the government has backed off on aggressive goals.
“It was just a matter of time before it was revised lower,” said analyst Sam Fiorani of Auto Forecast Solutions. “We saw that with the original cafe which set a target 1985 to hit 27.5 miles per gallon. And they pushed that one off because technology really wasn’t there.”
Fiorani says carmakers still need to make their vehicles more fuel efficient. If they don’t, they risk falling behind in the international competition. But, he says the change in standards gives them more breathing room.
”In the short term, it’s going to give manufacturers the chance to align better with what consumers are going to the dealership to buy.”