Automakers Spar with Regulators During Annual Industry Conference

Yesterday evaluation of Corporate Average Fuel Economy (CAFE) standards for 2022-2025 saw debate normally kept behind closed doors spill into the public domain.

It happened during the Management Briefing Seminars, an annual conference in Traverse City, Mich. and two groups that represent automakers clashed with regulatory agencies, advocates and other stakeholders. At issue is whether the so-called “54.5 mpg” passenger and light duty vehicle fleet standard by 2025 for fuel economy and emissions should be altered during the midterm evaluation period.

In fact, the rules are not a “mandate,” as others have reported, and the rules for 2025 set in motion in 2012 allow for fluctuations in consumer preference and sales volume in trucks versus cars. Roughly, it would work out to 35-40 mpg or so on window stickers by 2025.

As it is, auto groups agains raised the question of whether consumers are willing or able to buy fuel efficient vehicles that the government is mandating. Automaker lobbyists said they are able to develop the technology needed to meet tougher standards, but it could raise the purchase price for consumers as much as $5,000 over comparable cars.

SEE ALSO: 5 Takeaway Points From the EPA’s TAR leading to CAFE Midterm Evaluation

The federal standards are inconsistent, too aggressive, and will force automakers to sell cars that will cost more than consumers are willing to pay, said Mitch Bainwol, president and CEO of the Alliance of Automobile Manufacturers.

Chris Grundler, director of air quality for the federal Environment Protection Agency, argued that automakers had made more progress than expected over the last four years. That accomplishments makes the case that automakers are capable of making even more progress over the next 10 years, Grundler said.

“To me, I think the standards and the policy is working spectacularly,” Grundler said during a Management Briefing Seminars speech. “Automakers are outperforming these standards while they hitting new sales records. … So we think the industry is very well-positioned to meet the customer expectations while reaching significant new levels of environmental performance.”

John Bozzella, president and CEO of Global Automakers, a group representing foreign automakers and suppliers, said the current regulations are inconsistent from one agency to another. Automakers have expressed concerns about inconsistencies in the guidelines and difficulty understanding them with the EPA regulating greenhouse gas emissions while the National Highway Traffic Safety Administration is in charge of regulating fuel economy. There’s also the state programs, including California’s guidelines.

“We have programs that have different reasons for being,” Bozella said. “And what that does it creates different incentives. Each program has different tools, to manage not only compliance but to manage innovation while meeting consumer needs and we really need to work through that.”

SEE ALSO: Debate Stirred Up Over 54.5 MPG Target as Light Truck Sales Skew the Numbers

Automakers continued to press the issue of California’s Zero Emission Vehicles standards. Those regulations, in place in California and nine other states, were crafted by the California Air Resources Board.

Mike McCarthy, chief technology officer of CARB, acknowledged that automakers are capable of making more fuel-efficient vehicles at less cost by making gasoline-engine vehicles more fuel efficient. But California has not no intention of backing off its ZEV targets for sales of electric vehicles and hydrogen fuel cell vehicles, McCarthy said.

McCarthy said the standards are designed to force automakers to develop technology that will make a bigger difference in the long run. Federal agencies are making clear during the midterm review that its 54.5 mpg goal is only a guideline and not a mandate.

“We do have a ZEV regulation. It is a mandate and we openly call it a mandate,” McCarthy said.

Detroit Free Press