Automakers Adopt CA's Rigged Fuel Standards

California seeks to pressure Trump's EPA with its own efficiency standards for the entire country.

Thomas Gallatin · Jul. 26, 2019

Four auto companies — Ford, Honda, Volkswagen, and BMW of North America — recently joined together to sign a deal with California to meet its higher fuel-efficiency standards rather than the new and lower efficiency standards proposed by the Environmental Protection Agency. Under President Donald Trump, the EPA plans to roll back the Obama administration’s mandated fuel-efficiency of 54.5 miles per gallon for new vehicles by 2025 down to 37 miles per gallon. Under the California deal, the auto manufactures would need to meet an efficiency standard of 51 miles per gallon by 2026.

It’s clear that the four auto companies’ objective here is to pressure the Trump administration into adopting California’s standard so as to eliminate having to manufacture vehicles with differing standards for two markets. In other words, they are seeking to force a single, higher fuel-efficiency standard upon all automakers.

The Trump administration, on the other hand, is seeking to revoke California’s long-running authority to set not just its own clean-air standards, something the federal government has long allowed, but effectively set the standard for the whole nation. White House spokesman Judd Deere emphasized, “The federal government, not a single state, should set this standard.”

EPA spokesman Michael Abboud criticized the automakers’ deal with California, stating, “This voluntary framework is a PR stunt that does nothing to further the one national standard that will provide certainty and relief for American consumers.”

This is an interesting fight that upon first glance looks like a federalism battle. But, again, the real issue is that of California seeking to set fuel-efficiency standards for the entire country. Any standard with which all states must comply should be set by the federal government — if there’s any federal authority for such a standard, which is another matter. California, ironically, wants it both ways — the freedom to set its own standards and at the same time reject the federal government’s authority over national interstate regulations.

Meanwhile, these automakers are free to exceed the EPA fuel-efficiency standards should they choose and if the market demands. However, seeking to force all auto companies into meeting higher standards via government diktat simply because they believe it prevents the competition from taking advantage is not an embrace of free-market principles.

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