Motor Vehicle Fuel Efficiency

GM, Fiat Chrysler and Toyota’s Decision to Side with Trump on Gutting the Clean Air Act Is a Huge Mistake

Despite Their Pledge to Support a Middle Ground on Emissions and Fuel Economy Standards, a Block of Automakers are Choosing to Ignore Consumer Demand for Fuel-Efficiency and Clean Air

 |  Press Release

Washington D.C. — Today, the Consumer Federation of America (CFA) is calling out the 15 automakers[1] who have joined with the Trump Administration in its effort to dismantle the Clean Air Act (CAA) and the authority it grants states to advance clean car standards that save families money at the pump. CFA is conducting a public awareness campaign, criticizing the 15 automakers – especially GM, Fiat Chrysler and Toyota – who are going against the wishes of their customers and American consumers, as well as working to persuade the few automakers, who have yet to weigh in, to make the right choice and protect consumer pocketbooks and the air we breathe.

“These automakers had a choice, and they chose wrong,” said Jack Gillis, CFA’s Executive Director. “They could have sided with their customers and the four other automakers (Ford, Honda, Volkswagen and BMW) that already voluntarily agreed to a set of reasonable, achievable standards which lead to fuel savings, but instead, they’re following Trump down a dead end road.”

The states, led by California, offered a counter framework for a national clean car solution that is far better than the one currently being proposed by the Trump Administration. Four automakers have already chosen to sign on to this agreement. As part of this deal, they agreed to uphold the CAA that grants states the authority to adopt stronger than federal clean car standards. States representing 55 percent of all vehicles registered in the U.S. have sued to defend state authority granted by the CAA. “This is Federalism at its best—when the Federal government fails to meet the needs of the people, the states step in,” said Gillis.

“These four automakers are placing themselves on the right side of history by providing consumers what they want and deserve, which are the safest, cleanest, most fuel-efficient cars possible,” said Gillis. “The rest of the automakers, supporting the Trump roll back, are going against both market and consumer demand. Customers want to pay less at the pump, whether they own a Prius or drive a GM pick-up. The future is efficient vehicles and when gas prices spike, will GM and Chrysler need another government handout in order to survive?”

In 2009, when gas prices spiked, many automakers were caught flat-footed, resulting in lost market share, and profits, leading to the bankruptcy of two major American automakers. “Joining the agreement will create a critical safety net, ensuring that they deliver the cost saving, clean and technologically sophisticated vehicles that consumers want, thereby keeping their companies in the ‘black’,” said Gillis.

Three automakers, Daimler, Jaguar Land Rover and Volvo, have yet to take a side. In an effort to ensure consumers have more clean and fuel-efficient choices across the U.S., CFA is calling on the CEOs of these companies to join the voluntary emissions agreement spearheaded by California. At the same time, CFA is appealing to the 15 other automakers to abandon their commitment to join with the Trump Administration’s irrational decision to inflict more pain at the pump on hardworking American families.

“The state led voluntary agreement is in the best interests of both their companies AND their customers,” said Gillis. “Joining that agreement and choosing to stop defending Trump in his efforts to dismantle the Clean Air Act, would clearly demonstrate their commitment to meeting the desires of over 80,000,000 Americans who have consistently supported improved clean car rules and who will purchase vehicles impacted by the standards.”

“This is a fight to preserve a 56 year old federal law that gives states the ability to act in the best interest of their citizens,” said Gillis. “Tragically, Trump and a vast majority of automakers are working against the American people, unraveling the carefully crafted national consumer protection program that resulted from a consensus between the states, the federal government and all stakeholders.”

If more automakers join the state agreement, consumers, the economy and the automakers themselves could see the following benefits:

  • Consumers Will Save Billions of Dollars Which Will be Pumped Back Into the Economy: Our projections show that if the agreement is adopted by all of the major U.S. automakers, it would preserve $800 billion of economic benefits out of the possible one trillion in benefits provided by the current federal standards.
  • The Voluntary Agreement Supports the Ability of Automakers to Be Competitive in the Global Marketplace: Other countries are increasing their efficiency standards, with some pledging to abandon the internal combustion engine entirely within a few decades. The Agreement promotes a robust presence in the competitive global automotive market place, as consumers increasingly flock toward fuel efficient cars. Automakers who have not advanced the fuel economy of their vehicles will be left behind. The California agreement will enable to the U.S. to stay close to the rest of the world in the efficiency of their vehicle fleets.
  • Joining the Voluntary Agreement Will Increase the Production of Electric Vehicles: The agreement provides incentives for manufacturers to increase availability of EVs. As automaker investments have indicated, the vehicle fleet needs to be substantially electrified. In doing so, the industry will profitably recoup the billions that automakers have invested in EV technology.
  • The Voluntary Agreement Will Reduce Uncertainty Associated with Protracted Legal Challenges to the Trump Administration’s Anticipated Final Rule: Compliance with these compromise standards provides a clear regulatory path and enables product development to progress with confidence. A unified response by the manufacturers will likely reduce additional litigation.
  • The Marginal Cost of Compliance with the Voluntary Agreement is Lower than the Cost of Compliance with the Federal Standard: While the California agreement achieves 80% of the efficiency level of the federal standards, it will cost significantly less than 80% of the estimated cost to meet those standards. In addition, the industry has consistently experienced much lower costs than originally projected to comply with standards, and the Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) have consistently overestimated the actual cost to meet the standards. What is particularly significant is that the cost of improving fuel efficiency is not only quickly recouped, but covers the costs of safety improvements, new technologies, and other features along with inflation.

“Neither the American people, nor history, will remember these 15 car companies kindly if they work to dismantle long-standing law and good policy at the expense of American family budgets. We strongly urge these automakers as well as those who are undecided to stand with consumers, their customers, and their economic future by signing onto the sensible voluntary agreement.  It’s imperative that they disassociate themselves from the harmful actions being taken by the Trump Administration—doing otherwise is a big mistake with enormous economic and public health consequences,” said Gillis.

[1] Aston-Martin, Ferrari, Fiat Chrysler, General Motors, Hyundai, Isuzu, Kia, Maserati, Mazda, Mitsubishi, McLaren, Nissan, Subaru, Suzuki, and Toyota

Contact:
Jack Gillis, 202-939-1018