The New York International Auto Show kicks off April 14 at the Javits Center in NYC at a time of slowing demand for new cars and trucks. That’s one problem. Another is the coming showdown between automakers and environmental forces in New York and 11 other states over emissions standards.
New York, Connecticut, Maine, Maryland, Massachusetts, New Jersey, Oregon, Pennsylvania, Rhode Island, Vermont and Washington all follow California’s vehicle-emissions standards, which are tougher than those of the Environmental Protection Agency.
Carmakers Plus The EPA Against The 12
The states mentioned above make up about 40% of the U.S. car market and they want stricter standards. The Trump administration and auto industry lobbyists want to review federal emissions standards and likely roll at least some of them back. The 12 are not happy about that.
According to New York Attorney General Eric Schneiderman, “The Trump administration’s attempts to roll back readily achievable vehicle emission standards is a dangerous attack on the decades of progress we’ve made in cleaning up our air.” Schneiderman maintains that states the right to adopt stricter pollution standards.
EPA Budget Cuts
One way the White House hopes to discourage stricter emissions standards is by cutting the EPA budget. A document published by The Washington Post shows the president wants to eliminate $48 million this currently used for EPA vehicle and fuel testing and certification. This would “pretty much shutting down the testing lab,” according to Margo Oge, former Obama administration head of the EPA’s Office of Transportation and Air Quality.
Additional proposed cuts by Trump would include 168 out of 304 full-time jobs at the EPA. Overall Trump proposes cutting the EPA’s budget by 31% and eliminating more than 50 agency programs.
How Automakers Feel
Much has been written about the potential impact of reductions to EPA emissions standards on citizens (car buyers) and on the outrage expressed by environmentalists. What about car makers? Are they in favor of these reductions as one might expect? The truth is tricky.
First there’s the issue of just how much regulations might change and that is a big unknown. Current rules require a big boost in miles per gallon by 2025. What will actually happen to those rules depends on what automakers want and how strongly they fight for it.
Automakers Vague About Specifics
Even though carmakers have supported a review of emissions standards, they’ve been vague about the specifics. General Motors Co. (NYSE:GMD) CEO Mary Barra, Ford Motor Co. (NYSE:FD) Chief Executive Mark Fields and others who met with President Trump in Michigan last month, deferred to industry lobby groups for comment.
In a prepared statement, Mitch Bainwol, president of the Auto Alliance, which represents the industry said, “By restarting this review, analysis rather than politics will produce a final decision consistent with the process we all agreed to.”
Barra, Fields and other auto industry executives realize they walk a tight line between relaxed regulations and public support for emission control. In addition, the auto industry is a global business. Other countries have standards that, in some cases, are more stringent than those in force already in the U.S., let along standards that might be lowered under the Trump administration.
Then there’s the problem of those pesky state regulations. When states like California and New York pass tough standards, carmakers have to meet those standards or they won’t be permitted to sell their vehicles in those states. It’s easier, and more profitable to build vehicles to one standard, as opposed to several.