CA and 4 major automakers cut a deal, bypassing Trump EPA

[K1052]

Four automakers, California strike compromise on vehicle emissions

The Trump administration in August 2018 proposed revoking California’s legal right to impose its own state emissions standards or require a rising number of electric vehicles. The Trump administration argues that federal law should preempt California from setting its own emissions rules.

As part of that plan, the U.S. Environmental Protection Agency and National Highway Traffic Safety Administration backed freezing emissions requirements for new cars and trucks at 2020 levels through 2026. The proposal is not expected to go to the White House for final review for at least several more weeks, people briefed on the matter said.

The Obama-era rules adopted in 2012 called for a fleetwide fuel efficiency average of 46.7 miles per gallon by 2025, with average annual increases of about 5 percent, compared with 37 mpg by 2026 under the Trump administration’s preferred option.

Under the compromise struck with the four automakers, the stringency of the requirements would increase at a nationwide average annual rate of 3.7% annually starting in the 2022 model year through 2026, and 1% of that annual improvement could be covered by credits awarded for building electrified vehicles.

Aside from extending credits for building electric, plug-in hybrid and hydrogen fuel vehicles, the deal also hikes the cap for winning credits for fuel efficiency improvements not captured by traditional testing. The compromise would also remove a requirement to account for upstream emissions of fuels.

The proposal would allow automakers to adopt the California compromise and operate under one set of national rules.

https://www.reuters.com/article/us-...compromise-on-vehicle-emissions-idUSKCN1UK1OD

It's quite likely that remaining automakers will sign on to this. While CA had to compromise a bit it's still a lot better than what the EPA was up to.

As part of the bigger picture this kind of clawing power away from the feds by a huge economically powerful state has enormous implications. Liberal states with large economies will increasingly band together to steer away from federal policies that their populations don't favor. Companies will have no choice but to deal with them regardless of what the feds say. This is a natural consequence of conservatives attempting to rule with widening gaps between the opinion of the general population and their structural electoral advantages that afford them outsized representation on the Federal level.

 

[soundforbjt]

Automakers aren't stupid, they don't want to lose out on California huge purchasing power.

 

[UNCjigga]

Seriously, who didn’t see this coming? Automakers now get to go back to selling different products in different states or else cede market share to more efficient models. This could cost automakers more in the long run then just complying with the Obama-era rules. If they wanted relief, they should’ve lobbied for an extension (which would’ve made total sense—nobody believed they’d hit 55mpg average by 2025) rather than killing the entire deal. But Kenyan Man Bad!, so kill it they did!

 

[MomentsofSanity]

And the executive order trying to block this just because in 3... 2...

 

[K1052]

Automakers aren't stupid, they don't want to lose out on California huge purchasing power.

13 states and DC follow CARB vehicle standards. That's an enormous chunk of the economy.

 

[K1052]

And the executive order trying to block this just because in 3... 2...

The administration is trying to pull CA's waiver but I doubt they'll be successful. I don't think the companies want them to be since a new administration could either really shove it up their ass or turn CARB loose to do it.

 

[nakedfrog]

States' rights!
Wait, not like that. Stop that right now!

 

[glenn1]

So the "compromise" seems basically that CA recognized the implausibility of improvements called for under the Obama rules and adjusted them down to what's realistically possible. The headline figure of 3.7% gets downwardly adjusted minus 1% for building electrified vehicles minus some additional fraction for "fuel efficiency improvements not captured by traditional testing." So probably around 2.5% or less annually in actual terms, less if electric vehicles take off more (especially if subsidies are further raised). So basically introduce some models of high end electric SUVs to capture the credits (and profits from the SUV) and the fleet won't look much different in 2025 than it does now. Sell some loss leader subcompacts like the Fiat 500e and put an extra 2-3 MPG on the Mazda 6s of the world so the automakers can get back to making the actually profitable pickup trucks and SUVs without California further hassling them.

 

[K1052]

So the "compromise" seems basically that CA recognized the implausibility of improvements called for under the Obama rules and adjusted them down to what's realistically possible. The headline figure of 3.7% gets downwardly adjusted minus 1% for building electrified vehicles minus some additional fraction for "fuel efficiency improvements not captured by traditional testing." So probably around 2.5% or less annually in actual terms, less if electric vehicles take off more (especially if subsidies are further raised). So basically introduce some models of high end electric SUVs to capture the credits (and profits from the SUV) and the fleet won't look much different in 2025 than it does now. Sell some loss leader subcompacts like the Fiat 500e and put an extra 2-3 MPG on the Mazda 6s of the world so the automakers can get back to making the actually profitable pickup trucks and SUVs without California further hassling them.

This is basically the approach that CA proposed when this all started though now they've effectively captured nationwide regulatory power from the Feds instead of the Feds negotiating for a revised standard. CA still gets a standard much more than the Trump EPA would impose.

Also this doesn't really capture the whole picture as states move toward separate EV mandates and cities increasingly consider locking out fossil fuel vehicles to improve air quality.

 

[glenn1]

This is basically the approach that CA proposed when this all started though now they've effectively captured nationwide regulatory power from the Feds instead of the Feds negotiating for a revised standard. CA still gets a standard much more than the Trump EPA would impose.

Also this doesn't really capture the whole picture as states move toward separate EV mandates and cities increasingly consider locking out fossil fuel vehicles to improve air quality.

I guess it depends on whether you have a "glass half full" or "glass half empty" view on this. To me this was CA recognizing the Obama goals were not realistic and coming to the best actually feasible deal they could by leveraging some easy sweeteners (like the electric vehicle credit) that didn't really cost them anything to begin with. I certainly don't see this as the state having "effectively captured nationwide regulatory power" anymore than if the state mandated a state minimum wage above the national minimum wage means Sacromento now controls national wage policy. The feds set a national "floor" level requirement and CA convinced the automakers to go with a higher target for standardization. Same thing as Amazon agreeing to pay all its workers $15/hour since that was the min wage in some jurisdictions, they just decided it was easier to always make lemonade than not squeeze the lemons in some places but not others.

 

[sandorski]

It is poor Industrial Policy to let all your Competitors innovate alone into the future Market.

 

[K1052]

I guess it depends on whether you have a "glass half full" or "glass half empty" view on this. To me this was CA recognizing the Obama goals were not realistic and coming to the best actually feasible deal they could by leveraging some easy sweeteners (like the electric vehicle credit) that didn't really cost them anything to begin with. I certainly don't see this as the state having "effectively captured nationwide regulatory power" anymore than if the state mandated a state minimum wage above the national minimum wage means Sacromento now controls national wage policy. The feds set a national "floor" level requirement and CA convinced the automakers to go with a higher target for standardization. Same thing as Amazon agreeing to pay all its workers $15/hour since that was the min wage in some jurisdictions, they just decided it was easier to always make lemonade than not squeeze the lemons in some places but not others.

You've adopted an opinion that fits your preconceptions.

That this was an intentional strategy by the administration is just a rationalization for a huge failure of policy and governance. The same type of failures that have littered this admin's record trying to improperly change regulations without proper science or process. You're basically saying "they meant to do that" when there is absolutely no evidence that corroborates such a claim.

https://www.cnbc.com/2019/01/24/tru...90-percent-of-deregulation-court-battles.html

The Trump administration has lost more than 90 percent of its court battles over deregulation

 

[glenn1]

You've adopted an opinion that fits your preconceptions.

That this was an intentional strategy by the administration is just a rationalization for a huge failure of policy and governance. The same type of failures that have littered this admin's record trying to improperly change regulations without proper science or process. You're basically saying "they meant to do that" when there is absolutely no evidence that corroborates such a claim.

https://www.cnbc.com/2019/01/24/tru...90-percent-of-deregulation-court-battles.html

The Trump administration has lost more than 90 percent of its court battles over deregulation

No, I'm not providing any credit to the Trump admin whatsoever and like you think they're filled with bumbling fools. My point was the Obama standards were never really realistic and wouldn't have been achieved even if they were still in place. The "California compromise" likely approximates the technically and economically plausible limits of improvement that are available to be had right now. Just decreeing "you'll improve fleet fuel efficiency by 5% annually" doesn't magically create the technology or materials advances needed to make that happen. Nor is any amount of wishing that folks will suddenly stop buying SUVs and pickup trucks will make that happen either.

 

[K1052]

No, I'm not providing any credit to the Trump admin whatsoever and like you think they're filled with bumbling fools. My point was the Obama standards were never really realistic and wouldn't have been achieved even if they were still in place. The "California compromise" likely approximates the technically and economically plausible limits of improvement that are available to be had right now. Just decreeing "you'll improve fleet fuel efficiency by 5% annually" doesn't magically create the technology or materials advances needed to make that happen. Nor is any amount of wishing that folks will suddenly stop buying SUVs and pickup trucks will make that happen either.

That wasn't the implication of your post when you said "The feds set a national "floor" level requirement" like this was a plan.

The automakers themselves said the Obama era standards were achievable, after all they were deeply involved in writing them.

 

[Denly]

I don't follow cars/trucks as close as I used to, how's the out look for the next 5yrs? From my understanding we're very far away from 37mpg let alone 45mpg as of today, how are they going to get 45mpg with SUV/truck focus? Very few cars get 40mpg in the real world except plug in hybrid or EV.

 

[zinfamous]

I don't follow cars/trucks as close as I used to, how's the out look for the next 5yrs? From my understanding we're very far away from 37mpg let alone 45mpg as of today, how are they going to get 45mpg with SUV/truck focus? Very few cars get 40mpg in the real world except plug in hybrid or EV.

It's across fleet, not per vehicle. This is very reasonably achievable when you switch a certain percentage of your fleet over to electric/hybrid, and your ICE vehicles with smaller, turbo boosted engines, lighter oils, and fancy stuff like regenerative breaking. If your "worst" performer is something like 33/40, then it's not a stretch to get your fleet up to those average standards.

Obviously, this isn't as easy for moron companies like Ford that decide to stop making cars and only make garbage trucks and Crossovers or SUVs. Yeah, they are responding to idiot consumers with terrible taste, but it would certainly help if consumers actually had a memory that lasted more than 3 months at a time, so that horrific gas prices were more the assumed standard than a seasonal thing. --but, these things can still be done with hybrid engines for these big, ugly, useless vehicles that only Americans want.

 

[UNCjigga]

That wasn't the implication of your post when you said "The feds set a national "floor" level requirement" like this was a plan.

The automakers themselves said the Obama era standards were achievable, after all they were deeply involved in writing them.

I think in 2011 the automakers believed that was true, but by 2016/2017 you had aftermath of the dieselgate scandal, and auto supply chains hadn’t transformed enough to support mass mfg of electric vehicles (see Tesla Model 3—and they were already 100% electric!) Add in a trade war with China (rare earth metals/ batteries) and nobody believes 55mpg or 52.5mpg or 51mpg averaged over the fleet would happen by 2025.

 

[K1052]

I think in 2011 the automakers believed that was true, but by 2016/2017 you had aftermath of the dieselgate scandal, and auto supply chains hadn’t transformed enough to support mass mfg of electric vehicles (see Tesla Model 3—and they were already 100% electric!) Add in a trade war with China (rare earth metals/ batteries) and nobody believes 55mpg or 52.5mpg or 51mpg averaged over the fleet would happen by 2025.

I’m not sure sloth and fraud are the reasons I’d use to defend the industry’s lack of effort.

 

[glenn1]

I’m not sure sloth and fraud are the reasons I’d use to defend the industry’s lack of effort.

Yeah, sorry the auto companies don't suddenly stop making the hugely profitable trucks and SUVs that consumers want to buy, and instead switch over to using non-existent technology or change their production to money losing subcompacts you want them to make for reasons and can barely be given away.

 

[[DHT]Osiris]

*vehicle company makes 13 different trucks and SUVs*
*vehicle company makes one hybrid that looks like a fish*

See! Nobody wants these silly efficient hybrid vehicles!

 

[glenn1]

*vehicle company makes 13 different trucks and SUVs*
*vehicle company makes one hybrid that looks like a fish*

See! Nobody wants these silly efficient hybrid vehicles!

People will buy what works for them and every use case they have. If one of those uses (even if it's only occasional) is something a "hybrid that looks like a fish" won't do then they won't buy it. That might be ability to haul a given cargo weight, carry 6+ people, have a range of 500+ miles with refuel time under X minutes, whatever.

If your goal is to discover new tech for increasing MPG across all vehicles, then just having cash rewards for companies that create MPG innovations like the X-Prize Foundation would be a better way. Or pay the automaker a bounty for each extra fleet MPG they achieve year-over-year, and make it big enough to offset the profits they forgo for not making another SUV or pickup. Pretty much any method is better than naively setting a static target and saying "go create the tech to meet this artificial goal."

 

[[DHT]Osiris]

People will buy what works for them and every use case they have. If one of those uses (even if it's only occasional) is something a "hybrid that looks like a fish" won't do then they won't buy it. That might be ability to haul a given cargo weight, carry 6+ people, have a range of 500+ miles with refuel time under X minutes, whatever.

If your goal is to discover new tech for increasing MPG across all vehicles, then just having cash rewards for companies that create MPG innovations like the X-Prize Foundation would be a better way. Or pay the automaker a bounty for each extra fleet MPG they achieve year-over-year, and make it big enough to offset the profits they forgo for not making another SUV or pickup. Pretty much any method is better than naively setting a static target and saying "go create the tech to meet this artificial goal."

While I don't entirely disagree, at some point company profits needs to take a back seat (pun intended) to the environment. There's a lot of places where we need to give a little for our own survival.

 

[zinfamous]

Pretty much any method is better than naively setting a static target and saying "go create the tech to meet this artificial goal."

That's how government mandated regulation of the industry has worked over the last 50 or more years, and it hasn't hurt them at all. I'm tired of this same tired excuse that has been defeated again and again by the history of better vehicles, better profits, and cleaner air and environment as a result.

 

[glenn1]

While I don't entirely disagree, at some point company profits needs to take a back seat (pun intended) to the environment. There's a lot of places where we need to give a little for our own survival.

Maybe your paycheck needs to take a backseat to the environment and we should just confiscate it.

Sorry but this stupid progressive thinking that believes rich people and corporations just spend all day swimming in vats of gold like Scrooge McDuck and can easily afford whatever policy idea you have just by "buying one less yacht" is the thinking of a 4 year old. If you want to achieve some policy goal, then have taxpayers fund it and don't expect private companies to lose money and put themselves out of business for you. If you want people to drive electric cars instead of gas powered SUVs, have the government pay the automakers to produce them and give them away.

 

[zinfamous]

Maybe your paycheck needs to take a backseat to the environment and we should just confiscate it.

Sorry but this stupid progressive thinking that believes rich people and corporations just spend all day swimming in vats of gold like Scrooge McDuck and can easily afford whatever policy idea you have just by "buying one less yacht" is the thinking of a 4 year old.

It's more relevant and plausible than your first suggestion in this post.