Why a Federalized Version of 2019’s California Automaker Framework Would Fail

Are you spending too much time and money at the gas station? Our wallets are taking a huge hit this summer. We need bold action that delivers real relief from the pain at the pump.

In just a couple of weeks, consumers may start to see a glimmer of hope – if the Biden administration chooses to take strong action to meet their previous promises for better mileage and less pollution from the cars we drive.

This month, the White House is expected to announce its proposed revisions to the national standards for fuel economy and greenhouse gas emissions. As the Environmental Protection Agency and National Highway Traffic Safety Administration mull over the potential upgrades, it’s important to understand what their options are.

There are some good ideas on the table, and some bad ones. One of the bad options reportedly under consideration as a model is the flawed deal that California hatched in 2019 with automakers. That deal was created back when the previous administration was rolling back the fuel economy standards, and it should not be used as a starting point for the future.

Here’s what happened: In 2018 there were rules that put the United States on track to nearly double the fuel economy of new cars by 2025. The Trump administration announced a plan to roll back those rules, essentially requiring auto manufacturers to make no improvements in vehicle efficiency or emissions after 2020.

In 2019 BMW, Ford, Honda, Volkswagen Group of America, and Volvo agreed to a voluntary approach with the state of California, which allowed them to meet a weaker version of California’s requirements nationwide for cars and pickup trucks, rather than fall in line with the proposed rollback.

In exchange, California cut them a big break. Automakers that agreed to the state’s framework received a lot more flexibility — as in loopholes — and they got an extra year to meet those greenhouse gas targets, instead of adhering to stricter rules that would apply if California were to win a court battle over their right to set standards, which is now moot as the Biden administration plans to reaffirm that right.

When the EPA and NHTSA finalized the rollback in 2020, they cut the requirements for fuel economy by about 70 percent, setting up new car buyers to pay an extra $2,100 per vehicle in fuel costs as a result, by our estimates.

When you look at the numbers, the California-automaker framework isn’t that much better. A recent Consumer Reports analysis found that nationalizing the automakers’ framework would actually cut consumer savings up to 60 percent when compared with the now rolled-back Obama-era standards.

If the White House is seriously considering a proposal similar to the California-automaker framework, that’s bad news, and it would be a weak place to start on fuel economy for this administration, especially considering its commitment to cutting greenhouse gas emissions at least in half by 2030.

It seems like automakers are pushing hard for the Biden administration to use the California framework as a ceiling for the upcoming proposal. The main reason the framework falls so flat as a federal standard is due to the presence of loopholes and extra credits. The biggest loophole within the framework gives automakers double the credit for building electric vehicles, essentially allowing them to build twice as many gas guzzlers per EV that gets built. This is exactly why automakers are in favor of credits: they allow them to comply with standards by building a small number of EVs while making minimal improvements to the rest of their fleets.

These credits were designed to encourage the deployment of EVs, but recent research has shown that they’re more likely to actually slow the deployment of electric vehicles, due to the fact that they significantly reduce the effective stringency of the standards. It is these loopholes that make the framework look better on paper, but ensure that it fails to deliver the big, real-world savings and emissions reductions consumers need.

It’s a slap in the face when automakers keep lobbying for weaker standards when they know their customers want better fuel economy. A 2020 nationally representative Consumer Reports survey found that 94 percent of Americans who were planning to buy or lease a vehicle in the next two years said that fuel economy is important to them, with 64 percent saying that it was “extremely important” or “very important” when considering what vehicle to get next.

We also know most consumers want carmakers and the government to do more for better gas mileage and less pollution. Nearly three out of every four respondents said the federal government should continue to increase fuel economy standards, and automakers have a responsibility to consumers to improve mileage.

So the next time you’re at the gas pump, remember this: The federal government is facing a big moment –– with a clear demand and popular support –– to save people money and act on climate change. In the coming weeks, the Biden administration will either come out in support of stronger regulations that deliver cost savings and a healthier future, or the government will leave the United States to play catch up as the rest of the world rushes to beat the climate crisis.


David Friedman is the vice president of advocacy at Consumer Reports and is based in Washington, D.C.

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