Chicago Automobile Trade Association

Trump looks to lower mpg rules but more EVs, hybrids on the way

January 26, 2018
Automakers are expecting the Trump Administration to propose lightening fuel economy standards in late March, potentially making it easier to keep selling more trucks and SUVs, which carry fatter profits.
But even if the National Highway Traffic Safety Administration eases the standards, as expected, automakers will keep investing in battery and fuel-cell technology to lessen the automobile’s dependence on the internal combustion engine because large markets such as Europe and China continue to establish CO2-reducing regulations, and future White House administrations and Congresses likely will move to reinstate tougher rules.
Acting NHTSA Administrator Heidi King said this month that the coming proposed rule would be released March 30 and would cover model years 2022 through 2025. "It will be a proposal that will stimulate dialogue, robust listening to the data and the stakeholders that should inform a decision before we go to a final rule stage," she said.
The auto industry has lobbied Trump to revisit the fuel-economy standards because persistently low gas prices are driving consumer demand for pickup trucks and SUVs, which get poorer gas mileage than small and hybrid passenger cars. Trucks, SUVs and crossovers account for about two-thirds of new-vehicle sales, compared with one-third going to two- and four-door passenger cars.
Automakers in 2011 agreed to coordinated rules by the NHTSA, the Environmental Protection Administration and the California Air Resources Board that get stricter each year, culminating with a fleet average by 2025 of more than 50 mpg, a level that equals 36 mpg in real-world driving.
Hybrid and electric vehicles last year represented just 3 percent of new-car sales, and the best-selling hybrid in the market, the Toyota Prius, saw a precipitous sales decline.
"As long as there are not gas taxes to keep gas prices high and demand for more fuel-efficient vehicles consistent," said Dennis Keene, an auto industry consultant, "we are going to have a disconnect between consumer demand and government policy."


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