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18 Automakers Sign Letter Begging Trump For Easier MPG Regulations

Fuel / Comments

The world's top automakers claim stringent fuel economy rules could cost millions of jobs.

A few weeks after Ford CEO Mark Fields gave President Trump his opinion on rising fuel economy standards, Reuters reports that chief executives from 18 automakers have sent the White House a letter urging a revisiting of former President Obama's ambitious mpg goals. Heads of the Detroit Big Three, Toyota, Hyundai, Nissan, Honda, the Volkswagen Group and more all signed the letter. It articulates concerns similar to those expressed a few weeks back, that rising fuel economy standards could cost thousands or perhaps millions of jobs.

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The current goal is for automakers to have an average fuel economy of 54.5 mpg. The Environmental Protection Agency (EPA) has said that those numbers will likely be 50.8 mpg on the low end and 52.6 mpg on the high end come 2025 given that Americans are back to buying SUVs and trucks like crazy. The problem automakers have with these standards is that they will cost them money. The Obama administration noted that motorists would save $1.7 trillion on fuel costs over the lifetime of their vehicles. This savings would dwarf the expected $200 billion hit the auto industry would take as it found new ways to cut weight and make engines more efficient. Scrapping the regulations entirely is out of the question. It can be done but not easily.

Instead, automakers are fighting for a midterm review. The deadline for the review originally was April 2018. However, the EPA decided in January to lock in the original goals out of fear that the new administration would roll them back. A large part of Donald Trump's campaign involved bringing jobs back to the US. It's hard to believe he won't at least push for a new midterm review, especially once the press catches wind that "millions" of jobs could be at risk. The good news for Trump is that he is bulletproof here as he can always blame Obama if the EPA continues to put the squeeze on automakers. Maybe he can use this high ground to negotiate a better deal with automakers selling foreign-built cars in the US?