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Rebuking New Federal Rules, Major Automakers Cut Deal With CA On CAFE Standards




Cars Drive down the 210 freeway.
Cars Drive down the 210 freeway.
Photo by Joseph Stevenson via Flickr Creative Commons

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Four major automakers have reached a deal with California to increase gas mileage and greenhouse gas emissions standards, bypassing the Trump administration's plan to freeze standards at 2021 levels.

Ford, BMW, Honda and Volkswagen are parties to the deal with the California Air Resources Board, which had been at odds with the Trump administration for months. California has said it would exercise its powers to set more stringent pollution and mileage standards than the federal government has proposed. The four automakers see the California agreement as "insurance" to provide some certainty to the industry and the state no matter who wins the 2020 presidential elections, according to a person familiar with the talks who asked not to be identified because details of the negotiations haven't been made public.

Under the deal with California, fuel economy and corresponding greenhouse gas emissions standards would rise by 3.7% per year starting with the 2022 model year, through 2026, according to the statement from the four automakers. Automakers could get 1 percentage point of the increase by using advanced technology credits such as those for hydrogen fuel cell, plug-in gas-electric hybrids, and battery electric vehicles. Automakers also would get credits for devices that aren't counted in EPA test cycles such as stopping the engine at red lights and restarting it quickly when the driver wants to go. The process would be streamlined to get credits approved for new technologies.

The Trump administration has sought to freeze Obama administration standards that would have required the fleet of new vehicles to get an average of 36 miles per gallon in real-world driving by 2025. The freeze would keep mileage at around 30 mpg. The administration says the extra expense to comply with the requirements will raise the price of new cars, depriving buyers of new safety technology. The administration also has threatened to challenge California's ability to set its own standards.

With files from the Associated Press

Guests:

Coral Davenport, reporter for the New York Times covering energy and environmental policy with a focus on climate change; she tweets @CoralMDavenport

David Welch, Detroit bureau chief at Bloomberg News, where he covers the automotive industry; he tweets @DavidWelchBN