Automakers Side With Trump in Legal Fight With California

General Motors, Fiat Chrysler, Toyota and many others in the auto industry are siding with the Trump administration in a lawsuit over whether California has the right to set its own greenhouse gas emissions and fuel economy standards.

The three companies, plus a trade association called the Association of Global Automakers, said Monday they plan to intervene in a lawsuit filed by the Environmental Defense Fund against the administration, which is planning to roll back national pollution and gas mileage standards enacted under the Obama administration.

In the past, most of the industry had taken the stance that it wanted one standard, and it preferred that California and the Trump administration work out differences to develop it. Negotiations haven’t gone anywhere and in September, President Donald Trump announced his administration would seek to revoke California’s congressionally granted authority to set standards that are stricter than those issued by federal regulators.

The automakers decided to intervene in the lawsuit over the issue of California’s right to set standards. By intervening, the automakers changed their stance to siding with the Trump administration against the state. The automakers’ group, called the “Coalition for Sustainable Automotive Regulation,” also includes Nissan, Hyundai, Kia, Isuzu, Maserati, McLaren, Aston-Martin and Ferrari.

“The certainty of one national program, with reasonable, achievable standards, is the surest way to reduce emissions in the timeliest manner,” said John Bozzella, CEO of Global Automakers and spokesman for the coalition. “With our industry facing the possibility of multiple, overlapping and inconsistent standards that drive up costs and penalize consumers, we had an obligation to intervene.”

The group made the decision to intervene on how the standards should be applied, Bozzella said. That was even though the group wanted more environmentally friendly standards than the only proposal released so far by the Trump administration. “There’s a middle ground that supports year over year increases in fuel economy,” and promotes electric cars and innovation, he said.

Four other major automakers — Ford, BMW, Honda and Volkswagen — reached a deal with California in July to toughen the gas mileage and greenhouse gas emissions standards, bypassing the Trump administration’s push to relax them nationwide.

Ford, BMW, Honda and Volkswagen signed the deal with the California Air Resources Board, the state’s air pollution regulator, which had been at odds with the Trump administration for months.

The Trump administration has proposed freezing the standards at 2021 levels through 2025. A final proposal is expected by the end of the year. Many automakers have said they support increasing the standards, but not as much as those affirmed in the waning days of the Obama administration in 2016.

Under the Obama administration requirements, the fleet of new vehicles would have to average 30 mpg in real-world driving by 2021, rising to 36 mpg in 2025. Currently the standard is 26 mpg.

The Trump administration contends that freezing the fuel economy standards will reduce the average sticker price of new vehicles by about $2,700 by 2025, though that predicted savings is disputed by environmental groups and is more than double the EPA estimates from the prior administration. The administration says the freeze would make the roads safer by making newer, safer cars more affordable.

Environmental groups say the figures don’t include money consumers would save at the gas pump if cars got better mileage. A study released by Consumer Reports in August found that the owner of a 2026 vehicle will pay over $3,300 more for gasoline during the life of a vehicle if the standards are frozen at 2021 levels.

California’s authority to set its own, tougher emissions standards goes back to a waiver issued by Congress during passage of the Clean Air Act in 1970. In 2007, when Republican Arnold Schwarzenegger was governor, President George W. Bush’s administration denied California’s bid to place first-in-the-nation greenhouse gas limits on cars and trucks. But the state asked the EPA to reconsider its decision, and in 2009 — when Democratic President Barack Obama took office — the feds granted California’s request.

California has 35 million registered vehicles, the most of any state. A dozen other states and the District of Columbia also follow California’s fuel economy standards.