Washington, D.C. — Almost instantaneously after Donald Trump’s election, the car companies began to lobby the new president for a roll back of the very standards they agreed to five years ago. “Given Mr. Trump’s commitment to improving the daily lives of those who gave him their vote, acquiescing to this bold demand from corporate America would have a strong negative impact on the pocketbooks of his more important constituency—the hard working, economically struggling American households,” said Jack Gillis, CFA’s auto expert and author of The Car Book. There are seven strong reasons why the new administration should not, and will not, reduce fuel economy standards:
- The biggest beneficiaries of the CAFE standards are the ‘forgotten Americans’. The average household spends about $1,500 a year on gasoline. Because of the extraordinary impact of gasoline costs on the people who put Mr. Trump in office, it is unlikely he’ll want to increase the cost of driving for the everyday Americans who depend on their vehicles for work and family transportation.
- The current fuel-economy standards are good for the auto industry, suppliers, and consumers, but they have a particularly positive impact on job creation. A study by U.S. business alliance, Ceres, found that nearly 700,000 new jobs would be created by higher CAFE standards, and that higher job growth was correlated with higher standards. While net job gains are projected for 49 U.S. states from CAFE standards, big state winners include Indiana, Michigan and Ohio.
- Car companies are well on their way to full compliance with the standards. In fact, 56 percent of 2016 model vehicles already meet or exceed today’s targets. And some of them already meet the future 2025 target.
- Rolling back standards would hurt traditional U.S. car makers as foreign companies produce more of the fuel-efficient vehicles consumers want. Trump is committed to protecting U.S. companies and ensuring that they keep pace with fuel-efficient foreign companies will protect them from needing to be bailed out, as they were a few years ago when their sales lots were filled with large fuel-inefficient vehicles.
- The vast majority of Americans want fuel-efficient vehicles, according to a long standing series of consumer surveys conducted since 2011. The latest study, release in March 2016, found that, in spite of current low gas prices, 81 percent of consumers said they support federal fuel economy standards. It’s no surprise that fuel efficiency is still a top priority as consumers have had a long history of suffering from volatile gas prices. Certainly, Mr. Trump understands this volatility.
- The CAFE standard represents the very type of regulatory oversight that Mr. Trump has a stated a commitment to: regulations that respect the needs of the industry. CAFE is just such a regulation, which is why 13 of the 14 major car companies supported the standard when it was introduced. CAFE acknowledges the compliance challenges facing the car companies. It has been specially designed to compensate for changes in consumer purchase behavior and to be fair to companies who choose to produce larger vehicles. Mr. Trump likely understands that the greatest beneficiaries of these historically consensus standards are those who put him into office.
- The auto industry has invested billions in electric vehicle technology in order to meet the Zero Emission Vehicle requirements of various states. By rolling back the standards that are making these investments pay off, U.S. car makers will fall behind as Asian manufacturers flood the market with highly attractive plug-in EVs. This is precisely the opposite of the type of trade Mr. Trump has committed himself to implementing
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“The speed with which the automakers have sought to promote their private interests at the expense of the consumer interests, provides an early test of President-elect Trump’s campaign claim that he will stand against the influence of Washington’s corporate special interest lobbyists,” said Gillis.
Contact: Jack Gillis, 202-737-0766
The Consumer Federation of America is a national organization of more than 250 nonprofit consumer groups that was founded in 1968 to advance the consumer interest through research, advocacy, and education.